Time Frame Daily
Currency pairs:any
The rules we set for entry are very simple. We look for when the RSI crosses its
moving average. Picture illustrates when a trade is on.
We BUY when RSI crosses themoving average from below (green box and line) and SELL when it crosses fromabove (blue box and line). It is vital to note that a cross is only validated after the
daily candle has closed. We don’t take a trade on the day when the cross has formed
as it may disappear later in the day.
We enter the trade as soon as the new candle is formed i.e. at the opening
price.
Exit
One, and a powerful one which has proved very effective for me, is using a
percentage of the ATR (Average True Range). The ATR shows numerically howvolatile a currency has been recently. A small ATR (30-50 pips) shows the daily
ranges have been small, this currency pair is moving very little.
A higher ATR (100-
200 pips) shows a currency pair on a rollercoaster ride, either in a strong trend or
ranging wildly.
Obviously for a high ATR we need a bigger stop to give the trade some room to
breathe. (for more see pdf)
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