8# Simple Moving averege and MACD Trading System
Submit by janus trader 23/03/2011
4 hour chart - EURCHF
Long: Take a long trade when price closes above 100 SMA and MACD histogramgoes above 0 line.
Short: Take a short trade when price closes below the 100 SMA and MACD goes below 0.
Re-entry: When the price, once has given a long or short signal, retraces back to the 100 SMA, re-enter the direction you went the first time. It is recommended to do it the first 2
times the price hits the 100 SMA and keep a watch thereafter.
Scaling: I personally take 3 positions per trade. I set my first TP to 40, 2nd TP to 70 and let the third position run with Stoploss at breakeven.
As an example, once my trade hits the first target, I moved the second position to breakeven and leave the third as it is. When the 2nd position is hit, I move the 3rd to breakeven, giving the trade enough room to breathe. I then look for the price to come
back, to add to the position, if it is open. At times, when price comes back to the 100 SMA, I get stopped out at breakeven, giving me 100 pips on 2 positions.
This is a trend following system, and has it's bad days. To avoid getting trapped in a range, I use the Volatmeter indicator. It is, so far the best indicator I have seen that helps
detect a ranging a trending market. I will try and attach a couple snapshots of past trades, so the whole idea becomes clear.
The blue box is the main entry and the yellow, you can see, is the re-entry.
This is the continuation of the first re-entry. Notice a second re-entry. There is a third box I have drawn. It is a false signal.
Note: I take only one position while trading re-entries.
Share your opinion, can help everyone to understand the forex strategy.