Basic Entry & Exit Conditions
• Pairs traded EUR-USD, GBP-USD & USD-CHF. EUR-JPY traded sometimes. Other
pairs have been tested for this strategy but were deemed not suitable.
• 5 WMA crosses 20 WMA on 30 min chart + Filter
• Filter is used to minimize whipsaws. Based on eyeballing past crosses looking for
failures and seeing how many pips on average the move made before failing. Filter
currently (28/08/04) set for 20 pips for Eur & 25 for the other pairs. If going long add
spread to filter. Spread is not added for shorts.
• Chart set up: 5min, 30 min, 4hr & daily charts with:
5, 20 and 100 WMA.
2 x Stochastic: 5,3,3 and 50, 3,3
Bollinger Bands 20, 2
• Forex is a 24hr market but take 00:00 GMT as the Daily open. Take long crosses
above the daily open, short crosses below the daily open unless they're say 50 pips or
more away. I don't take crosses that head smack bang into the open because it's too
• Stop loss is the cross ( but use judgment if cross is close to daily open, 100wma etc)
• 1st target is the bollinger band, 2nd target is 100 pips from top/bottom, 3rd target is
wma20 on the daily
• Stops: move to break even after +20 (+10 if trade stalling)
I trade 4 lots - 1st lot out at +30; When you have 30-50 pips set stop to 30pips; 2nd
lot out at +50; When you have 50-100 pips set stop to 50pips; 3rd lot out by trailing
extreme of previous bar if average length (minimum +30); When you have 100 pips
or more set the stop to 100 and trail it every 10 pips.
• Never enter in the last 5 minutes of the 30 minute bar, wait for the next bar to break
the lower low or higher high of the previous 30 min bar
• Don’t enter when the 100wma is near to the cross and the price is heading towards it
(the distance has to be more than 20pips)
• Don't enter if there is strong resistance nearby, or if it is heading against the daily
trend or hovering around the entry level for quite some time (2 - 3 hours)
• A bounce is treated