This strategy is based on technical analysis. That means you have to check the charts to use and earn with it.
You have to open your MetaTrader 4 and add an indicator and an oscillator to your chart.
#1 Relative Strength Index (RSI): This oscillator shows if a currency pair becomes oversold or overbought. If a currency pair became oversold or overbought it will probably stop to move to the actual trend’s direction.
#2 Moving Average (MA): This will e a line on your chart. The name of the indicator tells what is it about. This shows an average price in the actual timeframe. We are using Exponential setup applied to Close prices with 20 periods. This will help us to be surer that the retracement of the pair is strong enough to trade.
Are you ready with the setup? Talk about the STRATEGY.
Here is an example to show an example.
We are searching for divergences on H1 charts. But what is a divergence?
You can see to orange lines on the charts. The EURJPY price moved with lower and lower lows, but if you check the RSI chart you can see that it started to go higher and higher.
You can see that on this chart the EURJPY’s price started to move up and it reached the Moving Average line. You can set a trade after the last hourly candle is closed with its body crossed with the Moving Average line. Be patient and wait for the end of each hour and never trade when the price hits the MA line.
The trade confirmed at the price 128.295.
How to set a trade? In the example, we set the trade a 128.295. Sure this is a buy because the RSI divergence shows that the negative trend changed to positive. We are want to earn 100 points – 10 pips – profit on each trade. Sure you can set the TP – Take Profit – to 100-150 points from the starting price.
The SL – Stop Loss – is an important part of trading. You have to use 250-300 points to set the SL. Sometimes this strategy will fail because of news, published economy data, etc.
In the example, you can see that the price reached 100 points profit in some hours.
We have to talk about one more thing. The trading volume.
How to set the trading volume?
The trading volume is counted from the actual Balance. For example, if your account’s balance is $500 trade with 0.15-0.25 lots.
We suggest checking the ECONOMIC CALENDAR.
If you see that High Volatility news will be published in the next 2-4 hours, we don’t suggest to trade with a pair that contains that currency. This is too risky for those who did not learn fundamental analysis. Don’t worry, you will have enough option to trade.
USE DEMO ACCOUNTS FOR THE FIRST 1-2 MONTHS TO PRACTICE THE STRATEGY!