Momentum Trading Forex Strategy
Do you want a forex trading strategy that turns into a profit within minutes of entering into a trade? If you are a trader who lacks patience in your trading and want to see your trade turn into a profit within minutes of your entering into it then read on. There are traders who lack patience and can't see their trade initially go into a loss before turning into a profit.
What they want is a forex trading strategy that can give them immediate results. So, here is one forex strategy that they can use. This short term momentum forex strategy turns into profit in a short time after entering into the trade.
Let's discuss this short term momentum forex strategy in detail now. In this momentum trading strategy, you will be using the 20 day EMA ( Exponential Moving Average), 100 day SMA ( Simple Moving Average) and the MACD ( Moving Average Convergence Divergence).
You will be using the default setting for the MACD. These setting are First EMA=12, Second EMA=26 and the Signal EMA=9. You will be trading on the 5 minutes chart.
Look for a currency pair that is trading below the 20 day EMA and the 100 day SMA. You will wait for this currency pair to start trading above the two moving averages by at least 15 pips.
Look at the MACD histogram. Enter into a long trade within 5 candles of the MACD turning positive. Place the stop loss at the low of the candle that broke above both the 20 day EMA and the 100 day SMA.
As soon as the trade turns profitable by the amount risked exit half your positions and trail the remaining position with a trailing stop with 20 day EMA minus 15 pips!
In case, the currency pair is trading above both the 20 day EMA and the 100 day SMA, wait for it to trade below both the moving averages by at least 15 pips. Enter into a short trade within five candles of the MACD turning negative. Place a stop loss at the high of the first candle that broke above both the 20 day EMA and the 100 day SMA. Wait for the trade to turn profitable by the amount risked. Exit half of the position and trail the remaining position with a trailing stop with 20 day EMA plus 15 pips!
Article Source: FxTradingStock.com
About the Author
Mr. Ahmad Hassam has done Masters from Harvard University. Download the Forex Bully Identifier and the Multiplier Indicators FREE. Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade.
by: Ahmad Hassam
Total views: 24
Word Count: 391
Date: Wed, 10 Nov 2010
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