Simple 5 / 8 Moving Average Crossover

I have been using a strategy for a few months now. This Forex Trading System is very simple and I have followed the rules exactly. Its certainly not holy grail but it has made me some nice pips over the last few months.

I use the 5 EMA and 8 EMA crossover on the daily chart. For the stop loss I use the low or high for the previous day (depending on if we are or short). Alternatively if this is too close or too far away, so the risk/reward ratio would be too low, I draw fib lines on the daily chart and trendlines to try and pickout important support and resistance points and place the stops at these. I always give priority to points where the market has bounced previous. I usually place the stop just above or below these points.

I have used it on these pairs: NZD/JPY, GBP/JPY and GBP/USD. It has worked best on these pairs in the past.

For the take profit, I trail it, usually by 50 pips on nzd/jpy , 100 on GBP/JPY and 50 on GBP. It loves trending markets but doesnt work to well in ranging markets, however as I used strategic stops and tps, The losses have been very small when the market ranges, sometimes even a small profit. On the plus side it has picked up and rode some nice trends. I picked up the first part of the major carry unwinding on gbp/jpy and nzd/jpy for some very very nice pips, A nice gain on equity whilst not risking too much. I had the sell signal on GBP/USD but that one got stopped out at +2 pips.

Other Forex Trading System: The Art of Trading MA

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