A "new" simple system based on MA

A "new" simple system based on MA

by hmaoui

Guppy MAs : ST (3/5/8/10/12/15) LT (30/35/40/45/50/55 instead of 60 because it is a Fib number)
Oscillator : Use one you master -> I use Slow Stochastics (5/3/3) or RSI (9) but it tells you the same thing, overbought oor oversold.
Price Action : look at candlesticks patterns in Google or search in the forum if you dont know.
TimeFrame (TF) : Use the one which suits your personnality and your balance account

The rules :

1/ Identify the trend if there is one : we will use the MAs (ST>LT and pointing up then Bullish - ST<LT and pointing down then bearish - LT flat then no trend)

2/ If the trend is bullish you will only go long. Then wait for compression of ST MAs and Oscillator in oversold zone - the best is when you get a candlestick pattern such as a hammer. In this case, you can enter with a tight stop (depends on the pair and the TF) and let your profits run away. Reverse for Shorts (Trend bearish, etc....).

3/ If there is no trend, then you will trade with oscillator : Sell when you are in the overbought zone and buy when you are in the oversold zone. Also draw your support and resistance lines because after few volatility, high volatility will come and so a new trend will start, and then you will change the way you trade (go to the first point)

4/ Exits could be different according to many things : if you trade on short TF maybe you expect to get a fixed amount of pips, but if you trade on longer TF you should let your profits run until the market is giving you a sign of reversal. It can be a divergence on the oscillator, a candlestick pattern, or simply a cross of the LT MAs by the price. In any case, be careful when you reach round numbers, and when there is a divergence on the oscillator. You can also exit when your oscillator is in the overbought (long) or oversold (short) zone and wait for a retracement to re-enter again and again until the trend is over. I insist : it depends on your personnality.