New Gold Dream Strategy

New Gold Dream Strategy is a classic trend-momentum trading system based on smoothed moving averages and indicators of momentum.

Time Frame 5 min or higher.

Currency pairs: Majors.

From an idea of Russ Horn.

Indicators for trading

Smoothig moving average 55 period high.

Smoothig moving average 55 period low.

William's percent range indicator 55 periods,

Stochastic oscillator (5, 5, 5).

Long Entry

1. Price action cross above the 55 SMMA set to High (green).

2. The %R crosses above the -25 level.

3. The Stochastic Oscillator is above its signal line.

4. When all the conditions mentioned above are met, we can place our long position.

We have two possible entry types: Aggressive and Conservative.

In the Aggressive entry, we open a buy order without waiting for the signal candle to

close.

In the Conservative entry, we wait for the signal candle to close above the 55 SMMA

set to High before placing our trade. This serves as a confirmation that we are

trading on the right side of the market.

5. Set the Stop Loss a few pips below the most recent swing low point.

6. Set the Take Profit level twice the amount of the stop loss, or close the trade when

the price closes below the 55 SMMA set to High.

Buy example

On the image above, we have a GBP/USD 5 minute chart. Along the vertical line (A), all

conditions for placing a long trade were met at once - the price crossed above the 55

SMMA set to High, the 55 %R crossed above the -25 level and the Stochastic Oscillator

was above its Signal line.

So a buy trade was opened at the close of the signal candle, where all rules were met,

along the horizontal line (B) at 1.60715.

Immediately after the buy trade was placed, the Stop Loss was set just below the last

swing low (C), for 6 pips at 1.60655.

A Take Profit of 12 pips above the entry was set at 1.60835 (D). As you can see, the

Profit Target was hit 35 minutes later.

Sell Entry

1. Price action cross below the 55 SMMA set to Low (Crimson).

2. The %R crosses below the -75 level.

3. The Stochastic Oscillator is below its Signal line.

4. When all the conditions mentioned above are met, we can open a short position.

For an Aggressive entry, we don’t need to wait for the current candle to close before

entering the trade.

For a Conservative entry, wait for the candle to close below the 55 SMMA set to Low

before placing the trade.

5. Set the Stop Loss a few pips above the most recent swing high point.

6. Set the Take Profit twice the amount of the Stop Loss, or close the trade when the

price closes above the 55 SMMA set to Low.

Sell Example

Along the vertical line (A), all the rules for a sell trade were met simultaneously. The

price has crossed below the 55 SMMA set to Low, the 55 %R crossed below the -75

level and the Stochastic Oscillator was below its Signal line.

Immediately after the signals above appeared, a short trade was opened at 1.29760 (B).

Then a Stop Loss of 12 pips was set just above the nearest swing high point at 1.29920

(C).

Last but not least, the Take Profit of 32 pips was set at 1.29440 (D), which was

achieved 40 minutes later.

The advantage of this strategy is that you can trade any time frame and unable to stem losses in the side phases of the market.