Catching trends during market sessions is a valuable decision every trader loves taking when deemed fit.
The Smoothed RSI forex trading strategy takes into use a fine blend of basic indicators that it deploys in dishing out buy/sell trading market alerts.
Chart Setup
MetaTrader4 Indicators: SMMA-Crossover_Signal.ex4 (default setting), SmoothedRSIInverseFisher.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day
Recommended Trading Sessions: Any
Currency Pairs: Any pair
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy order if the following indicator or chart pattern gets displayed:
- If the spring green upward pointing arrow of the SMMA-Crossover_Signal.ex4 custom indicator takes position below the candlesticks as seen on Fig. 1.0, price is said to be pressured higher i.e. a signal to go long on the currency of interest.
- If the blue line of the SmoothedRSIInverseFisher.ex4 custom indicator breaks above the 50.00 level, it is a trigger to buy the asset of focus. Notice that the blue line spiked above the 88.00 level, a region that suggest extreme bullish conditions in the market.
Stop Loss for Buy Entry: Place stop loss 3 pips below immediate support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If the red downward pointing arrow of the SMMA-Crossover_Signal.ex4 custom indicator takes position above the candlesticks, price is said to be making a U-turn from its ongoing bullish stance, hence an exit or take profit is advised.
- If the blue line of the SmoothedRSIInverseFisher.ex4 custom indicator breaks below the 50.0 level as witnessed on Fig. 1.0, it is a trigger to exit or take profit at once.
Sell Entry Rules
Place a sell order if the following is put on a display within the activity chart:
- If the red downward pointing arrow of the SMMA-Crossover_Signal.ex4 custom indicator takes up space above the candlesticks as seen on Fig. 1.1, price is said to be pushed lower i.e. a signal to go short on the currency of interest.
- If the blue line of the SmoothedRSIInverseFisher.ex4 custom indicator breaks below the 50.00 level, it is a trigger to sell the currency pair of choice. Notice that the blue line dips below the 12.00 level, a region that depicts extreme bearish conditions in the market.
Stop Loss for Sell Entry: Place stop loss 3 pips above immediate resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the spring green upward pointing arrow of the SMMA-Crossover_Signal.ex4 custom indicator takes position below the candlesticks, price is said to be making a possible reversal away from its bearish stance, hence an exit or take profit is advised.
- If the blue line of the SmoothedRSIInverseFisher.ex4 custom indicator breaks above the 50.0 level as illustrated on Fig. 1.1, it is a trigger to exit or take profit at once.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The SMMA-Crossover_Signal.ex4 indicator is a trend following indicator that is built on the principle of two Simple Moving Averages crossover.
The SmoothedRSIInverseFisher.ex4 custom indicator is built on the principle of the exponential moving average and the relative strength index.