40 MA Channel Trading System

40 MA Channel Trading System is a trend-following strategy.
The purpose of this strategy is to keep us on the correct side of the market at all times, through the 40 MA channel. when the price are in the channel we do not trade,If the prices are above the channel, is a buy signal, if the prices are below the channel , is a sell signal.
Time Frame 15 min or higher.
Currency pairs: any.
Forex Indicators:
40 Moving Average Smoothed, high;
40 Moving Average Smoothed, Low;
15 EMA, close.
Trading Rules
When prices are above the 40 bar moving average of the Highs,
we go long on a violation of the high of the bar making the local low.
• When prices are below the 40 bar moving average of the Lows, we sell short on a violation of the low of the bar making the local high.
• We do not enter on a gap opening violation of either the high or low.
• We do not enter a trade if the 15 bar moving average is flat or has turned away from the direction of the trade we want to take.
At 'A' prices are inside the channel. Price bars must be entirely out of the channel before we can use the Camelback. When prices are above the channel, we attempt to purchase a breakout of the high of the bar that makes the local low. 'B' is a local low. An entry 1 tick above 'B' would have enabled the covering of costs and possibly a small profit. A trailing stop beneath the low of each bar would have seen profits maximized 4 bars after 'B'. 'C' was the next local low. An entry 1 tick above the high of 'C' would have done little more than allow cost covering and a breakeven exit some time in the next two time intervals. The next local low was 'D'. Entry 1 tick above the high of 'D' would have resulted a profitable trade. Entry above the next local low, 'E', might have only covered costs and broken even. Entry above local low 'F' would have given some nice profits, as would entry above local low 'G'.
H' was a local low whose high was never violated, so there could not have been an entry. At 'I', the exponential moving average is turning and is flat. In addition, there was no possible entry on a violation of 'I.'
Subsequently prices move to the other side of the channel. We are then looking to be short.
Once we are operating on price bars that are entirely out of the channel, we then try to sell a breakout (violation) of the low of the bar that makes the local high.
'J' is a local high. It is the top of a minor correction to the recent medium term downtrend. Shorting the breakout of the low of 'J' would have resulted in a profitable move. 'K' was a local high. Shorting a breakout of the low of 'K', when it happened 3 days later, also resulted in a profitable trade.
At 'a', 'b', 'd', and 'e' we sell short a breakout of the low of a local high. At 'c' and 'f,' we buy a breakout of the high of a local low.
Once prices broke below the channel, the selling short of a breakout of the low of almost every price bar that made a local high would have resulted in a nice profit, or at the very least, have covered costs. We've placed an 'x' by every point at which we think this could have
happened. The very last 'x' would almost surely have resulted in a loss.

Related

Trend Forex Strategies 454610857367129122

Post a Comment

emo-but-icon

item