My Simple Trading System

February 27, 2007 at 5:12 am | Posted in Forex | 18 Comments



I want to post my very simple trading system, for those of you who’s a beginner in Forex I strongly recommend you to follow and familiarize yourself with this simple system. The purpose of this system is to identify trend so that we can place trade following the trend. Your profit target in the beginning should not be set too high.. it is sufficient to set profit target at +10 pips.

First we need to identify the main trend, for this purpose we will use the 4 hour timeframe chart


The 4 hour chart settings as follow :

  • 5 EMA applied to the close
  • 10 EMA applied to the close
  • Stochastics (10 , 3 , 3)
  • RSI 9

Next chart we will use is the 15 mins timeframe chart, if the main trend in the 4 hr chart is going up we will look to trade long (buy) in the 15 mins chart, if the 4 hr chart is trending down we will be looking to open short position. This is the entry rules on the 15 mins chart after we have confirm our trend on the 4 hr chart :

Long Trade Rules :

  1. 5 EMA must cross above the 10 EMA (indicated on the chart by the black candle).
  2. RSI must be greater than 50.
  3. Stochastics must be headed up and not in overbought territory.
  4. MACD histogram must go from negative to positive OR be negative and start to increase in value (we want to catch the trend early so the MACD histogram must be negative)

Refer this chart for long trade rules :


Short Trade Rules :

  1. 5 EMA must cross below the 10 EMA (indicated on the chart by purple candle)
  2. RSI must be less than 50.
  3. Stochastics must be headed down and not in oversold territory.
  4. MACD histogram must go from positive to negative OR be positive and start to decrease in value (we want to catch the trend early so the MACD histogram must be positive)

Refer this chart for short trade rules :


15 minutes chart setup

  • 5 EMA applied to the close
  • 10 EMA applied to the close
  • RSI (9)
  • Stochastics (10 , 3 , 3)
  • MACD Histogram (12 , 26 , 9 )


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  2. Hi !

    I’m testing your simple system and seems to work nice.

    However the 10 pips profit, aparently could be increased.
    You don’t mention about the stop loss. What you advice for this purpose?

    Any suggestions for more elaborated systems?



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  6. Your system works very well on many stock in EOD also.
    Thanks for system.

  7. hai……. nice blog…… msti dh pro tred ni……

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  9. Hi, good and simple trading system you have got. Forex trading should be simple like this. There’s no point making it complicated and can’t earn profits.

    But one thing is that you set profit at 10 pips. Do you have a good risk to reward ratio? I know that this will push up the success rate, but it’s good to have a healthy risk to reward ratio for successful trading. Just a piece of my advice. I have a free trading system too, but take more profits, you can check out at my blog

    Dan (CEO of FTP)

  10. terdapat pelbagai seminar buat duit di internet pada masa kini

  11. sebuah metode trading forex yg menarik.
    kalender forex di seputarforex

  12. great tutorial.
    keep posting brow

  13. Percuma forex system di blog saya

  14. more thanks
    for all this informations

  15. Thanks for your updates. I really be grateful for your work to this site. I hope you can continue this kind of good quality work in future also.
    Forex Trading

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