Strategies help traders avoid common mistakes by providing a strict and understandable analysis system. By following it, you get closer to success and understanding market patterns.
Here’s a simple strategy that both beginners and professionals can use.
- Short-term moving average (50-period MA)
- Long-term moving average (100-period MA)
- Classic Stochastic (14, 3, 3)
Let’s take a look at a 15-minute USDCAD chart.
We see a clear bearish trend since a short-term moving average (50MA) is below the long-term moving average (100MA). Therefore, in this situation, we will be looking for selling opportunities.
Bearish trend (50MA < 100MA)
- Stochastic is above 80
- Price closed below 50MA
- Entry: 1.30184
- SL: 1.30319 (slightly above 50MA)
- TP: 1.29977 (1.5 risk-reward ratio)