Forex Crossover Strategy – Serious profits to be made!

Forex Crossover Strategy – Serious profits to be made! 

Introduction

After testing and monitoring this strategy constantly over a prolonged time, it has resulted in successful trades of high volumes. In this article, I will illustrate and thoroughly explain the Forex Crossover Strategy. This strategy requires three indicators; EMA (Exponential Moving Average), RSI and MACD. There are certain settings that need to be applied to these indicators to ensure accuracy and reliability. These are listed below.

• EMA: EMA(5) - Red, EMA(10) - Blue
• RSI: Set to 10 
• MACD: Fast(5), Slow(9), Signal(4)

Once the indicator settings have been allocated correctly, change the time frame of your graph to 1 hour. This is crucial as these settings will not work otherwise. 

This system is incredibly easy to understand and use, yet extremely effective. It can also be used throughout any major currency pair, provided that the time frame and indicator settings are applied. 

What should my risk and reward be?

I personally would advise a take-profit of 20 pips/points and a stop-loss of 15 pips. 

When do I take a trade?

A buy trade should ONLY be taken if: 

1. EMA(5) crosses EMA(10) from the bottom AND
2. The RSI enters 50 from the bottom and crosses it.

A sell trade should ONLY be taken if:

1. EMA(5) crosses EMA(10) from the top AND
2. The RSI is above 50 and drops below and crosses it. 

The MACD indicator simply demonstrates the general trend and flow of the market. 

The pictures below of these conditions should give you a clear indication and illustration of what is required from this strategy to warrant taking a position. 

As demonstrated above, there were 4 different opportunities where the EMAs had crossed. Lets analyse these individually, by looking at all indicators and judging whether entering a trade would have been supported by them.

Opportunity 1: EMA(5) had crossed EMA(10) from above, indicating the presence of a sell position. Looking at the RSI for confirmation of this, it was floating above the 50 mark but was on its way down. This would have warranted a sell position and as illustrated from the graph above as well as the advised take-profit of 20 pips, this trade would have ended successfully. 

Opportunity 2: EMA(5) had crossed EMA(10) from the bottom - which is a condition for a buy position. The RSI was also on its way up, which would have confirmed that trade. Following the "rule" of a 20 pip take-profit, the trade would have also ended successfully.

Opportunity 3: This is very similar to Opportunity 1, in the sense that it would have been a sell position, as both indicators as well as the MACD would have supported this. Judging by the candle sticks that had followed this point, our target of 20 pips would have been made within an hour.

Opportunity 4: Easy buy position, wasn't a lot of volatility or movement during that period however, the take-profit would have been reached within a few hours towards the end of the business day, yielding another successful trade.

What can I take from this strategy?

Of course, with any strategy, there is no 100% success rate as the market can strongly spike in any direction at any time. However, more often than not, this strategy has proved itself to yield serious profits when analysed correctly by judging all three indicators and sticking to the 1 hour time frame. All 4 opportunities above were across roughly a 48 hour window, all of which would have ended successfully. This demonstrates the strength of this system, but as always, it is always advised to trial and test it for a few weeks on a virtual/demo account first. 

Disclaimer: This system is simply only for educational and entertainment purposes, therefore, I cannot be held accountable for any losses or profits made on your part. Forex carries the risk of losing trades, but can also make a lot of profit if analysed correctly.