A Basic System

Any system need to have a very good basic to stand on. Once the basic is sort out, then all the accessories can be add on. Just remember not to add too much to it. Today I am going to give a basic system. It consist of only 2 indicators. Being simple, it is able to generate good signal. Just remember to put SL properly.


Indicators:
1. LWMA 55
2. MACD standard setting

Time frame: 30m

Stop Loss : 35 pips

Take Profit : 35 pips or more.

Currencies : EurUsd, GbpUsd, EurJpy, GbpJpy

Trading System:
LWMA act as a thin trend line. If the price is above it, its uptrend. If the price is below it, its downtrend. So you buy or sell according to trend. Never reverse trade. MACD also shows the trend. If MACD is above 0, its uptrend and the other way around.

I have put 3 vertical lines in the chart where MACD cross 0. Once MACD cross 0, you should only trade according to trend. You entry should be on the LWMA 55 or close. At the moment MACD has cross 0 and is heading down. From now on only consider short position. Try to enter as close as possible to LWMA 55.

Caution has to be taken, even though MACD has cross the trend is not yet full down actually. There is another indicator that I use to show trend and its not full down yet. Unfortunately that indicator is no where in the chart because it is not on GbpUsd chart. It is somewhere else.

Now you wonder why its not there. The truth is most people fail because what they are looking for is not there. That is what I meant with looking at the wrong direction. The trend indicator for GbpUsd is not on GbpUsd chart. Weird isnt it?

You can take this basic system and try to add on what ever system you have. Hopefully it is useful. Good Luck


Source for this Article www.Forex-King.blogspot.com