THE MOVING ENVELOPES TRADING STRATEGY

"Moving Averages can be a great tool for determining the master trend but also to signal trades by using the Moving Average Envelopes"


TRADING STRATEGY

Style: Swing Trading Strategy

Name: Trading the Moving Envelopes Strategy

FINANCIAL ASSETS

Forex Majors | Metals and Energy | Stocks | Indices



TIMEFRAME

■ H1 timeframe (1-Hour)



INDICATORS & SETUP

This strategy is applied using two Moving Averages and the ADX

In order to create the envelope, you need two simple moving averages (SMA). Any signal generated by the SMAs is confirmed using the Average Directional Movement Index (ADX)

1. Two SMAs (Two Simple Moving Averages)

SMA-1 (fast): choose 9 periods

SMA-2 (slow): choose 21 periods

2. ADX

ADX Settings

2. Average Directional Movement Index with Meta Trader 4 default

setting (ADX 14). A level of 40 is added.



TRADING SIGNALS

This is how you may implement the Trading the Moving Envelopes Strategy

■ (↑) Long Trades

If the fast SMA (9 periods) crosses above the slow SMA (21 periods) you get a Buy signal. Confirm this signal with a falling ADX. A falling ADX indicates that the market volatility is falling and that may be good news for an upcoming bullish market.

■ (↓) Short Trades

If the slow SMA (21 periods) crosses above the fast SMA (9 periods) you get a Sell signal. Confirm this signal with a rising ADX. A rising ADX means that the market volatility is rising.



TRADING ORDERS

Take Profit: 240-300 pips | ■ Stop-Loss: 80-100 pips | ■ Profit/Loss Ratio: 3

 


CHART: MOVING ENVELOPES (EURUSD)

Moving Averages can be a great tool for determining the master trend but also to signal trades by using the Moving Average Envelopes

 


 

 

FIND ALSO: ► EA BUILDER TESTER | ► GET STARTED WITH FOREX | ► TRADE SYSTEMS

STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES

FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX REBATES | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY

 

Trading the Moving Envelopes Trading Strategy

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