The system of long-term trading on the Forex market
This trading system is designed to work on H4 and daily charts. The system is based on the Momentum oscillator. This oscillator determines the impulse, i.e. increase of price movement. The impulse value is determined by subtracting the moving average from the price at the time of exchange closing. When the price closes above the moving average and moves upwards from it, the momentum is optimistic and increases; when the price closes below the moving average and accelerates downwards from it, the momentum is bearish and increases. The system is mainly used on EUR/USD and GBP/USD pairs.
The idea of the system is to open trades on reversals, when one trend changes to another. Therefore, it uses maximums, minimums and moving averages. There are two Momentum oscillators on the system chart. One represents the upper level (High), the second lower level (Low). When the trend goes up, we use “Momentum” (Low), and when the trend goes down – “Momentum” (High). Exponential moving averages with values of 50 and 100 are used to determine the trend.
Example of trading on a four-hour chart. The purchase position opens when EMA 50 crosses the top of EMA 100. The red line of the oscillator must be higher than 100. The stop-loss is installed behind the local minimum. The position can be closed when the oscillator falls below 100.
It’s the same with sales. We open the position after crossing the red line downwards. The blue line of the oscillator should fall below 100. The position is closed when the level rises above 100.
If the trend remains the same after closing the trade, you can reopen positions with the corresponding oscillator readings. The methods of exit from the positions can be different. You can use trailing stop or fixed takeprofit. With a fixed Take Profit, we recommend 60 pips for EUR/USD and 70 pips for GBP/USD on the 4H chart. The daily chart shows 200 and 250 points, respectively.