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A Forex System.

There are a few systems that work in much the same way to varying degrees. Have a look at this Levitt Bros video which demonstrates a few different combos….
http://www.screencast.com/users/LeavittBrothers/folders/Default/media/5ebb0420-2c74-4db4-824c-a281fc3f7a8d

I discovered one last year which I’ve been using for 8 months now. It’s not perfect but I’ve had good results. I’ve posted details before but I’ll outline again.

I use the XAO because I trade the stocks from that index.

Daily chart

MACD fast 13 slow 21 signal 9
Stochastic %K 50 %K slow 8 %D 20

Method:

When both indicators are crossed up … trend is UP (go long)
When both indicators are crossed down … trend is DOWN (go short)

When the trend is indicated up I can take long positions and visa versa.

gfresh… you’re right there… have to wait to make sure it has crossed up properly before trading accordingly. I like to wait for a day or two before taking the signal as confirmed. I’ve also started using RSI trend to confirm a cross.

Also as Ingot has suggested with his method… better if the two signals cross together. I’ve found with my method that the closer the signals are together, the stronger the move and the more reliable it is. I always look for confirmation in price support levels as well.

A problem that can arise with indicators in volatile markets like we’re experiencing at the moment is that the indicators can get volatile as well so it becomes difficult to discern if it has in fact signaled a trend change.

This is the first time I’m using this system in this type of market so what I’ve decided to do is switch to a weekly chart. It will signal a little later but it looks like it will be more reliable. When the index starts trending again I’ll switch back to daily.

The DPO and CCI indicators look like they work well also and I’m going to give it a try, but I think they will suffer from a certain amount of volatility as well.

Which ever system you use I can honestly say it’ll save/make you big bucks. It has kept me out of the August fall as well as the recent declines.

As traders we can’t hold on in hope. This system does make it easy to manage your risk.



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