I know there are some traders who want a trading system which is simple to understand and visually easy to look at. If you want to be a successful trader, first of all you should find a good trading system and of course the next step is learning the system and following it. No matter what you are trading, what your strategy is, you have to follow these rules in order to make profit.
In this tutorial I am going to try to help you a simple but profitable trading system that I have been using for some time. This strategy works on EUR/USD, AUD/USD and GBP/USD and JPY crosses. We are going to use 1H time frame in order to get rid of the noise in the market.
Please take a look at the chart below before I explain the details:
There are 2 indicators in this system so it is very easy to follow. The Detrended Price Oscillator is a tool that smooths the trend in prices, allowing you to more easily identify cycles and overbought/oversold levels. Basically, if you consider long-term cycles as made up of a series of short-term cycles, then analyzing these shorter term components can be helpful in identifying major turning points. The Drive indicator is a great tool to decide when to go in.
1. DPO has to be above the 0 line
2. Drive indicator has to cross over (the green line crosses over the red line).
1. DPO has to be below the 0 line
2. Drive indicator has to cross over (the red line crosses over the green line).
Profit Target: 35 pips.
Stop Loss: 30 pips.
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