Stochastic, Parabolic SAR and EMA are common mt4 tools for technical analysis. This strategy is made with combination of these three tools. In this system, 200 EMA is used for trend identification. This strategy can be used as scalping purpose. Both professional and beginners can use this simple trading system.
Submit Your Comments:
1) 200 EMA (Exponential Moving Average of the close price).
2) Parabolic SAR with default setting.
3) Stochastic(5,3,3) with horizontal line 80 and 20.
Buy signal: First condition for this system is that price must stay above 200 EMA. When stochastic cross at 20 level, then you have to check parabolic sar. If parabolic sar starts dots in the upside direction then all the condition will be satisfied and you can take buy entry. Above 200 EMA, you have to find only buy entry. You should not find sell entry if price remains above 200 EMA.
Sell signal: First condition for sell entry is that price must stay below 200 EMA. When stochastic cross at 80 level, then you have to check parabolic sar. If parabolic sar starts dots in the downside direction then all the condition will be fulfilled and you can take sell entry. You should find only sell entry when price remains below 200 EMA.
Time frame: H1 or H4.
Stop loss and take profit:Take profit can be set as 50-60 pips. When your trade goes 30 pips profit, then close half of your trade, and set your stop loss at your entry point for your safety. Stop loss will be some pips above the recent swing high(for sell entry) and some pips below the recent swing low(for buy entry). You can set trailing stop also.
Currency pair: Any pairs.
Risk warning: This is made of 3 trading tools. You can only take entry after getting confirmation from all tools. You have to practice this strategy in demo before starting in real account. You must follow money management for applying this trading system.