Setting :
Simple Moving Average (SMA) 100
Damiani Volatmeter 10,60,1.4 (download Damiani volatmeter here)
MACD - 15,26,9
4 hour chart
Pairs EURCHF (it has a medium level volatility and it does not get trapped between news, though it reacts mildly but it could be worth checking the other pairs)
System Rules
Long:
Take a long trade when price closes above 100 SMA and MACD histogram goes above 0 line.
Short:
Take a short trade when price closes below the 100 SMA and MACD goes below 0 line.
Re-entry:
When the price, once has given a long or short signal, retraces back to the 100 SMA, re-enter the direction you went the first time. It is recommended to do it the first 2 times the price hits the 100 SMA and keep a watch thereafter.
Retrace entry:
When a bar is over 100 pips, wait for a retracement to occur towards the 100 SMA line and then enter. This will save you from unnecessary draw down.
Exit rule
Scaling:
Take 3 positions per trade. Set first TP to 40, 2nd TP to 70 and let the third position run with Stoploss at breakeven.
Stop loss:
1. Previous high/ low or what you call as support and resistance.
2. AutoPivot Indicator. Use only the weekly option in it and place stop accordingly.
Filter
This is a trend following system, and has it's bad days. To avoid getting trapped in a range, use the Volatmeter indicator. It is, so far the best indicator to helps detect a ranging a trending market. In volatmeter indicator watch when the white line crosses above the green, It mean the market beginning a range or already entered into it. When the green line crosses above the white line, market getting into a trend, this is what we looking for to take short position or long position.
As an example; once trade hits the first target, moved the second position to breakeven and leave the third as it is. When the 2nd position is hit, move the 3rd to breakeven, giving the trade enough room to breathe. Then look for the price to come back, to add to the position, if it is open. At times, when price comes back to the 100 SMA, get stopped out at breakeven, it has given 100 pips on 2 positions.
Another example
The blue box is the main entry and the yellow, you can see, is the re-entry.By Marketsnipers from www.forexfactory.com
