Trading with Retracement Strategy is a forex trading strategy which is a trend following forex trading system. It is one of the best trends following free forex trading systems available today. Trading with Retracement strategy forex trading system is a moving average and oscillator based forex trading strategy. A combination of trend indicator (moving average) and momentum based (RSI and MACD) produce amazing results. Trading with retracement strategy has generated above average result during the back testing process. This forex trading system is versatile as it can be used on several time frames to trade several instruments.
When you install Trading with Retracement Strategy in your metatrader, your chart should look like this:
- Moving average
This forex trading system uses 21 day simple moving average. And we should be buying and selling on the basis of this moving average. When the market is above this indicator we should be buying and when this market is below the moving average, we should be selling.
You should be buying only when the RSI is gaining momentum on the upside and you should be selling only when the RSI is gaining momentum on the downside.
MACD comprises of a histogram that fluctuates in positive and negative territory, when the histogram is positive it is a bullish market condition and when the MACD histogram is in negative territory, it is a selling condition.
Buying Conditions Using Trading with Retracement Strategy.
- Market should be up trending.
- Market should be bouncing from the recent swing low.
- Market should cross above the 21 day simple moving average.
- RSI should be moving upside.
- MACD histogram should be positive.
- Place your long position when all of the above conditions are met.
- Place your stop loss below the recent swing low.
- Take your profit when market breaches below 21 day simple moving average.
Selling Conditions Using Trading with Retracement Strategy.
- Market should be down trending.
- Market should be retreating from the recent swing high.
- Market should cross below the 21 day simple moving average.
- RSI should be moving downside.
- MACD histogram should be negative.
- Place your short position when all of the above conditions are met.
- Place your stop loss above the recent swing high.
- Take your profit when market breaches above 21 day simple moving average.
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