We present you a simple but profitable forex strategy that hides a small risk and has proven results back in time.
Currency Pairs: EURUSD, USDJPY, GBPUSD, EURGBP, EURJPY and all major Forex pairs
Indicators: EMA with period 250, EMA with period 500, and Bollinger Bands with period 40 and deviation 2
Conditions for Buy: We use the moving averages to determine the direction of the trend in this case EMA250 should be above EMA500. Buy entry after a breakout of the Bollinger Bands Bottom Band from the bottom up.
Conditions for Sell: Similarly, here EMA250 should be below EMA500 then the trend according to the strategy is downward. Upon entering the top Bollinger Bands, the upper band is broken down.
Take Profit: 100 TIPS
Stop Loss: 150 taps
IMPORTANT: Move Stop loss to break even after a 20 pip movement in the winning direction.
The test results show a probability of a 20% drawdown with a probable profit of over 100%. Here is very important to choose the level of risk according to the size of your account and the amount of total trading investment you have faced. Given the dynamics of the forex market and the relatively frequent consolidations and sharp movements, the strategy has a good track record of moderate risk. The results below show tests for the EURUSD pair with real tick data for the period from the beginning of 2016 up to mid. 2018.
In conclusion, when implementing the strategy, we must carefully select the financial instrument and if we apply it manually, we can also take into account market sentiment and distribute the position in parts with appropriate Japanese Candlesticks signals, which can improve our results in implementing this strategy on the forex market.