Smashing Forex System part II

Rules for Sell Signals (Short Trades):

- We must first establish that we’re currently in a strong downtrend.

The conditions for determining that price is in a strong downtrend

are as follows:

a. Price is below both EMA50 and EMA200

b. EMA50 just crossed EMA200, and is currently below EMA200.

c. MACD value is negative.

- When we already know that we’re in a downtrend, we’ll then wait for

price to pull-back (retrace).

 

When price rises, it makes MACD value increase and MACD value

eventually becomes positive.

- The trigger is when MACD value turns from positive back to negative.

When that happens, we enter at market price with two lots.

Stop Loss: We place a protective stop loss 1 pip above the Highest

Price of the Pull-Back (Retracement).

Profit Targets: We have 2 different exit strategies for the 2 lots as

follows:

Exit Strategy 1: We exit the first lot when MACD turns from

 


negative to positive. At this time, we might also move the stop loss for

the second lot to break-even.

Exit Strategy 2: We exit the second lot when EMA9 cross EMA20 to

the upside

 

Figure 8 - That price is in a strong downtrend are as follows: Price is

below both EMA50 and EMA200; EMA50 just crossed EMA200, and is

currently below EMA200; MACD value is negative

 

 

 Figure 9 - Price pulls back (retraces). When price rises, it makes MACD

value increase and MACD value eventually becomes positive.

 

 

Figure 10 - MACD value turns from positive back to negative. When

that happens, we enter at market price with two lots.

 

 

Figure 11 - We place a protective stop loss 1 pip above the Highest Price of

the Pull-Back (Retracement).

 


Figure 12 - We exit the first lot when MACD turns from negative to

positive. At this time, we might also move the stop loss for the second

lot to break-even.

 

 

Figure 13 - We exit the second lot when EMA9 cross EMA20 to the

upside.

 

 

 

 

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Forex Retracement Strategies