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4H Simple System

Setup:

100 Simple Moving Average
Damiani Volatmeter
MACD – 15,26,9
4 hour chart – EURCHF

The 100 Simple Moving Average serves as a support/resistance line as it is known to be
used by major banks and financial institutions, a self-fulfilling prophecy, so to say.

System Rules

Long: Take a long trade when price closes above 100 SMA and MACD histogram goes above 0 line.
Short: Take a short trade when price closes below the 100 SMA and MACD goes below0.

Re-entry: When the price, once has given a long or short signal, retraces back to the 100
SMA, re-enter the direction you went the first time. It is recommended to do it the first 2
times the price hits the 100 SMA and keep a watch thereafter.

Retrace entry: When a bar is over 100 pips, wait for a retracement to occur towards the
100 SMA line and then enter. This will save you from unnecessary draw down.

Exit rule

Scaling: I personally take 3 positions per trade. I set my first TP to 40, 2nd TP to 70 and
let the third position run with Stoploss at breakeven.

As an example, once my trade hits the first target, I moved the second position to
breakeven and leave the third as it is. When the 2nd position is hit, I move the 3rd to
breakeven, giving the trade enough room to breathe. I then look for the price to come
back, to add to the position, if it is open. At times, when price comes back to the 100
SMA, I get stopped out at breakeven, giving me 100 pips on 2 positions.

This is a trend following system, and has it’s bad days. To avoid getting trapped in a
range, I use the Volatmeter indicator. It is, so far the best indicator I have seen that helps
detect a ranging a trending market.

In The Zip File , You should see the software files:

 

AutoPivotIndicator.ex4

Damiani_volatmeter.ex4

Period_Converter_Opt.ex4

4H Simple System.pdf

 

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