Strategy Forex Capture
Strategy Forex Capture is based on the convergence divergence indicator moving average (MACD MACD or - as it is sometimes called), as well as the indicator Stochastic (Stochastic Oscillator), which help traders identify good opportunities for trading in the forex market.
Although the use of these indicators forex fairly easily, but their value falls as the price goes to the market trend. But if you still try to combine the power of both oscillators, then Forex traders receive a very good conclusion for Toy profitable trades .
First, let's briefly look at what are the indicators: Stochastics and MACD.
Stochastic (Stochastic Oscillator):
Stochastic was developed in the 50s of the 20th century and it is mainly used to show the current location of the closing prices on a range of high (low) currency for a certain period of time. This indicator shows the forex count (influx) offers to buy or sell foreign exchange market. When the indicator values ??are below 20 - the market is oversold, and when the indicator values ??are higher than 80 - the market is overbought.
Stochastic more suitable for short-term trading , because able to isolate the top and falling prices in the market.
Oscillator MACD (MACD):
MACD-oscillator based on moving averages (26-day and 12-day exponential moving averages (EMA), along with the 9-day EMA, which is the signal) - used in sideways markets. That it shows the relationship between prices , rather than market conditions (oversold or overbought).
Let step by step look at forex strategy "Capture" for example cross-rate NZDJPY.
After a decline, which has been in the past 24 hours, the market appeared upward trend , because and stochastics, and MACD oscillator are rising .
So check the chart for the chosen currency pair (which can be any) Stochastic indicator with parameters 7, 3 and 20 and the indicator MACD.
1. Identify the trend. After the Stochastic indicator line D% turned up, forex trader is looking for growth or the intersection of the indicator MACD, which in turn determines the longer-term trend.
2. Conclude a deal in the direction of a certain trend.
In our example, the transaction (Figure) a trader opens a trading position to buy, and as stochastic oscillator, MACD oscillator and show up . As a result, our 1st trade deal will be opened at Point B.
3. We estimate the trade position. Once formed the right conditions, the trading position is open for purchase at the "capture" and where the entry was made at the closing hour candles , at a price level 94.29. As a result, the stop-loss order was placed below the low of the trading session - 94.01, as required by the rule of risk management.
This transaction was used trailing stop , so that when earnings growth to reduce risk in the event of a rollback or reversal of the market against trading positions. The result was a profit: 159 points - before the trip a positive stop-loss.
for a deal to sell the strategy to capture:
1. Determine the trend of the indicator MACD
2. We look forward to the moment when the direction of the stochastic (crossed downwards) and MACD match.
3. Open a deal to sell at the closing hour and the opening of the new.
4. Place a stop-loss and Teyk-profit or a trailing stop.
What can be concluded:
Stochastic indicator forex is good to apply for short-term transactions, while at the MACD indicator as better used for more long-term trading positions - use these indicators together to enter into good deals.