Instruments: EUR/USD, GBP/USD, USD/CHF, USD/JPY.
Charts: H1, H4, D1.
Indicators:
MA(6);MA(35);MA(150);MA (365).
The point of the strategy is to spot early signs of a reverse and to open the position in the direction of a breakout. In order to determine the breakout 2 slow MA’s with 150 and 365 periods are used, and 2 fast MA’s with 6 and 25 periods are used to confirm a rebound.
When to open long positions:
The price broke out the slow MA;MA(6) is on the same level or above the slow MA;After the price touched the fast MA, switch to a lower chart and wait for a reverse signal. It should be noted that all other MA touches are not important, the position has to be opened only after the very first rebound;For example, after receiving the signal on the H4 chart wait for the confirmation on the H1 and open the position after a resistance breakout. Stop-loss is placed behind the local high. Usually, it is the high of the breakout candle. Take profit – two times longer than stop-loss.
When to sell:
The price broke down the slow MA;MA(6) is on the same level or below the slow MA;After the price touched the fast MA, switch to a lower chart and wait for a reverse signal. It should be noted that all other MA touches are not important, the position has to be opened only after the very first rebound;
For additional profit, a trailing stop option can be used that would allow to catch longer trends. Also, take profit can be placed at important support and resistance levels.
Source. Liteforex
