This is a swing strategy that uses GBPUSD pair in a 4-hour timeframe with EMA indicators, but you need to check the daily timeframe to know the main trend. This method has the potential to profit 100 pips a month.
Slow stochastic with the settings(13,5,5)
EMA 4, EMA14, and EMA 50 on the 4hr chart.
4 EMA must cross 50 EMA and 14 EMA, then enter a trade at the market price or a pending stop order. The stop order is the buy stop or sell stop. This must be on a 4-hour chart.
Place stop loss within 50 pips.
Exit the trade when 4 EMA reverses and crossed 14EMA on the next open candle.
Then filter out potential bad trade using the stochastic indicator on the daily chart.
For Valid Long Entry: Slow %K above Slow %D on the Daily Chart
For Valid Short Entry: Slow %D above Slow %K on the Daily Chart
Note: the %K&%D on the stochastics are the two line on the stochastic indicator chart that crosses each other based on where price is going.
5. Stochastic is used on the daily chart because it follows the trend.
6. Refer to rule number 3 for taking profit.
Allows you to enter a trade after the trend started.
Profitable on a trending market and can profit hundreds of pips.
Moving Averages are lagging indicators, there is a chance that you enter a trade a little late. It is wise that the entry point would have been anywhere from 2-7 candles back.
This also means that at the entry where you got into a trade, the price may be due for a temporary pullback and if your stop loss is not wide enough, you will get stopped out.
Not good for ranging market.
Note: You can use this strategy on any currency pairs and pairs that have characteristics of a trending market.
How to install 4 Hours GBPUSD Forex Swing Trading Strategy?