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101# SMA H1 Trading System,

Submit by Joy22 (Written by Johan Van Der Westhuizen)

 

Indicators - 80 SMA

Lot Size - 8

Description

The system works on a 1 hour time frame, when the market moves away from

the SMA I will look to enter a trade towards the SMA.

Chart Setup

Add the 80 SMA (simple moving average) with a setting of shift 1, apply to: Median price (HL/2). I use this

SMA with the1 hour time frame.

 

System Rules

Short Trades:

1. I look for a rapid, unsustainable bullish movement away from the SMA line of close to or more than 40 pips.

2. Once I spot this move, I look for any signs of the move getting exhausted.

Some times by looking for reversal candle patterns or shorter candles forming, or any other signs of exhaustion.

3. I then enter a bearish trade of 1 lot.

4. I place my target limit anywhere between 10 pips and the SMA line depending

on what I am comfortable with at that stage.

5. I don’t put in a stop loss at this point.

6. If the market continues to move bullish against my trade I do not exit the trade

but once again I wait for it to move more or less 40 pips away and I then look for

signs of exhaustion. Once this occurs I enter a second bearish trade of 3 lots.


7. I will now look to put a profit limit of 20 to 40 pips to cover for the loss on my

first entry and still make profit on my second entry.

8. If the market continues with another bullish run against my trading direction I

will repeat the process but enter the market with 9 lots this time round.

9. I will now put in a Stop loss at the lowest point the market reached and take

out all my open trades if I did not manage to take profit by the time this level is

reached.

 

Long Trades:

1. I look for a rapid, unsustainable bearish movement away from the SMA (simple moving average) line of

close to, or more than, 40 pips.

2. Once I spot this move, I look for any signs of the move getting exhausted.

Some times by looking for reversal candle patterns or shorter candles forming, or

any other signs of exhaustion.

3. I then enter a bullish trade of 1 lot.

4. I place my target limit anywhere between 10 pips and the SMA (simple moving average) line depending

on what I am comfortable with at that stage.

 

5. I don’t put in a stop loss at this point.

6. If the market continues to move bearish against my trade I do not exit the trade

but once again I wait for it to move more or less 40 pips away and I then look for

signs of exhaustion. Once this occurs I enter a second bullish trade of 3 lots.

7. I will now look to put a profit limit of 20 to 40 pips to cover for the loss on my

first entry and still make profit on my second entry.

8. If the market continues with another bearish run against my trading direction I

will repeat the process but enter the market with 9 lots this time round.

9. I will now put in a Stop loss at the lowest point the market reached and take

out all my open trades, if I did not manage to take profit by the time this level is

reached.

Short Trade Examples

Example 2

Rapid movement started away from SMA at point A to point B on the chart below

l was looking for a short trade.

Reversal signal occurred for me at point B Inside candle

I would have entered short at the 99.365 Red line with 1 lot

I would have set my take profit at the 99.007 blue line

The Take profit blue line was met at C

Total profit = 36 pips

 

 

Long Trade Example 1

A Rapid movement occurred downside of the SMA from point A to B.

A reversing pattern formed at B. Inside candle

My entry Point would be at the black line: .78463

My take profit zone would be from .78473 to the SMA line

I set my take profit at the blue line

The market met the blue line at point C

Profit on this trade: 30 pips

 

 

Long Trade Example 2

A Rapid movement occurred downside of the SMA from point A to B.

A Reversal pattern formed at Point B Inside candle

I would then enter the market at the .79317 black line

My take profit zone would be from.79417 to the SMA line.

I would take profit when the price crossed the blue line at Point C: .79812

Profit: 50 pips

 

 

 

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Reversal Pattern Formation