FOREX Strategy “Outside Method”
1. The indicator in question is EMA (exponential moving average) with an averaging period of 9.
2. Used timeframe – М15 (15-minute price chart)
3. Currency pair – GBP / USD
To open a trading position, look at Japanese candlesticks and their location relative to the EMA (9):
• The body and shadows of the candlestick do not touch the EMA (9);
• The best option – the upper or lower shadow of the candlestick is at a distance of more than 1 point from the EMA (9);
• The candlestick should close above the previous high in a bullish trend or below in a downtrend.
Position opening rules:
In an uptrend, we open a buy deal at the opening of the next candle, and in a downtrend, we open a sell deal also at the opening of the next candle.
Position closing rules:
• Immediately set stop loss and take profit after opening a trade.
• Limiting losses set at the Low (uptrend in the market) or High (downward trend in the market) of the previous candlestick.
• An order to take profit is placed at a distance equal to the height of the previous Japanese candlestick.
• If the price has gone sharply in your direction and you have a profit of 20 points or more, then we move the position to breakeven (taking into account the spread).