The moving average strategy “Window MA” is based on the use of one indicator – exponential moving average (EMA) and a clear implementation of the rules of the system. In fact, you can use any currency pair, but it is better to use EURUSD, because the parameters listed below are optimized for it. Time interval – any, but it is better from M15 and above, to better filter out false signals.
The name of the Forex strategy “Window MA” was due to a kind of window that is formed between the EMA and the price.
Conditions for entering a long position according to the Forex strategy based on Moving averages “window MA”:
- We impose on the chart of the currency pair EMA with a period of 8, apply to the slose, the color red (Red). You can use the windows_ma template.tpl.
- When closing the candle above EMA (8), we are waiting for the next candles (in the amount of 5-15) to close above our moving average. A long position is opened at the time of the rollback prices down and touch or the breakdown of the EMA (8).
- Stor Loss put in the amount of 40-70 points, Take Profit-10 points less (30-60).
- When the price moves in our direction and reaches Take Profit (more precisely, 5 points lower), Stop Loss is transferred to the opening point.
For a sale transaction, the conditions are mirror-symmetrical.
When trading, follow the rules of money management and trade the minimum lot. Proportional increase of the lot is possible with the growth of the Deposit.
An alternative option is a slight increase in the volume of the transaction after 1-2 stop Loss triggers, i.e. receiving a loss. After making a profit on the next transaction again return to the original volume.
Example. EURUSD, M15.
Candle in 04.15 05.07.2011 closed below EMA (8). Waiting for the close of the next candle is below EMA (8). At 06.15 the price makes a pullback and touches the EMA (8). Open for sale at 1,4494. Stop Loss should be set at the level 1,4534, Take Profit – 1,4464.
At 09.00 the position is closed with a profit of 30 points.
Remember that the profitability of trading depends very much on the broker you choose!