63# Smashing Forex System 2 Trading System

Submit by Janus Trader (author Frank Lim)

 

Pairs:all.

Time Frame: 4H and higher

 

Indicators:

Exponential Moving Average 60-period (EMA60, Blue color in the

illustrations)

Commodity Channel Index 14-period (CCI14)

These are standard, common indicators and are included in every charting

program. You can use any charting software program you like: E-signal,

MetaStock, TradeStation, MetaTrader….

This system is only used for daily timeframe. You can also use it for 4-hour

timeframe. But in that case, you have to tweak the stop loss, profit target,

trailing stop appropriately.

 


Rules for Sell Signals (Short Trades):

There are only two rules for sell signals:

1. Price closes below EMA60

2. CCI value is lower than -100

When we have these two conditions, we enter at market price with two lots

- Stop Loss: We place a protective stop loss either just above EMA60

or at -200 pips, whichever less risky.

- Profit Targets: When we have 200 pips in profit we exit one lot.

Move stop loss to break even for the second lot. We then use a trailing

stop of 200 pips for that lot. That means, when we’re 400 pips in

profit, we move stop loss to 200 pips. And so on…

We can also move stop loss to the recent low each time price break that low.

That way, we can follow the trend until the end.

Sell Trade Example:

 

Figure 1 - Price closes below EMA60 and CCI value is lower than -100.

We enter with two lots. Entry price: 1.6505. Stop loss is placed just above

the EMA60 at 1.6705 (risk = -200pips)

 

 

 

 

Figure 2 – At 1.6305 we exit the first lot for 200 pips in profit. At that

time, we also move our stop loss for the second lot to break even. We then

use a trailing stop of 200 pips for that lot.

 

 

Figure 3 – Price finally hits the trailing stop. We exit the second lot at

1.5905.

 

 

Rules for Buy Signals :

There are only two rules for sell signals:

1.Price closes above EMA60

2.CCI value is lower than +100

When we have these two conditions, we enter at market price with two lots

- Stop Loss: We place a protective stop loss either just below EMA60

or at -200 pips, whichever less risky.

- Profit Targets: When we have 200 pips in profit we exit one lot.

Move stop loss to break even for the second lot. We then use a trailing

stop of 200 pips for that lot. That means, when we’re 400 pips in

profit, we move stop loss to 200 pips. And so on…

We can also move stop loss to the recent high each time price breaks that

high. That way, we can follow the trend until the end.

 

 

Share your opinion, can help everyone to understand the forex strategy.

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