The Forex Smart strategy has won the respect of many speculators who managed to apply it in practice. This task is possible for any participant of exchange trade depending on experience.
Everyone would like to have look at the price chart and predict how the rate will change. But in fact if you want to earn at the currency exchange it is necessary to comply with strict rules, otherwise Forex trading turns into a lottery.
In one article we have presented detailed information about Forex Smart. There is no need to study other materials. Briefly, clearly, to the point, we will explain how to make money with the “smart system”.
Many tried to improve the system adding new elements, trying to improve this excellent strategy. Friends, do not reinvent the wheel, Smart strategy already contains everything to make money at the currency exchange and increase capital. Everything you need is to follow the instructions of Forex indicators and practice, because good quality signals are received quite often.
Smart Strategy Description
• Currency pair – any. The best results – EUR / USD;
• Trading terminal – Step2Trade;
• Time period – H1, H4;
• Opening hours – 24/7;
Indicators in the Forex Smart system
You have to activate five classic instruments to start a work
• Weighted Moving Average (WMA8, WMA21);
• Moving Average Convergence Divergence (MACD);
First, we add two linear-weighted moving averages with periods of 8 and 21. There are many systems based on sliding lines, Forex Smart uses additional filters to improve the quality of entries in the transaction. The simple intersection of WMA curves serves as a message about the onset of a trading moment. And in order not to follow a false signal, we apply the indicator Parabolic.
• Step – 0.0026;
• Maximum – 0.5;
When the Parabolic signal line is higher than the price, the trend is considered bearish, which means that we are looking for an opportunity to sell the asset. When below – we consider only purchases. You can often observe situations where all indicators stand in an ideal position, except Parabolic, which gives a controversial team. In such a situation, one should give a miss for opening an order.
Forex Smart strategy got its name due to the clever use of classic trading tools. Stochastic also makes a difference. The intersection of signal lines is certainly important in analyzing the exchange situation, but more importantly not how, but where.
• K Period – 12;
• D Period – 12;
• Slowing – 5;
• Levels 20, 40, 60, 80;
Smart strategy in making a trading decision is recommended to pay attention to finding the price relative to overbought / oversold zones. Sometimes you can face a situation where all indicators, including Parabolic, are in a good position, but the Stochastic indicator is either above 80 or below 20. This indicates a possible end to the Forex momentum and the proximity of the corrective phase. Of course, the lines K and D can tend to zero or 100 infinitely, but you should not neglect this rule.
We know about all the advantages of the MACD indicator, but in the Forex Smart system it is just an additional filter. We do not want to underestimate the importance of one of the most respected tools in Forex, but the ideal situation for us will be when the histogram and signal line cross the zero mark, with the generated signals of the remaining instruments.
• Fast EMA Period – 8;
• Slow EMA Period – 21;
• Signal SMA Period – 2;
How does Smart strategy recommend to open a position?
1. WMA8 and WMA21 crossed and gradually expand.
1.1. Interlaced movings of trade signals are not served.
1.2. Moving averages are not used as support / resistance.
2. The forex order is opened exclusively in the direction of the trend, which is determined by Parabolic.
2.1. When Parabolic is above the price – consider selling.
2.2. When Parabolic is below the price – consider purchasing.
2.3. Parabolic can act as support / resistance.
3. Stochastic lines intersected and are above level 20 and below 80.
4. The MACD signal line crossed the histogram. The ideal situation for Forex Smart when the line and the histogram cross the zero level forming a trading signal.
4.1. Under other conditions, it is possible when the histogram and the signal line fall below the 0 line when selling.
4.2. Under other conditions, it is possible when the histogram and the signal line rise above the 0 line when purchasing.
The transaction is closed by the signals of the Stochastic indicator. This is due to the fact that thanks to the settings, the indicator reacts to changes in quotations, but does not hurry to complete the current trend. Other indicators will also advise you to exit the deal, but the Forex Smart strategy gives a priority to Stochastic teams. When the lines K and D intersect, and the fast curve begins to fall below the level of 60, you should consider leaving the purchasing process. It should be left when the fast line goes above the level of 40.
1. Traders often ignore the rules and enter the market when Stochastic is in the overbought / oversold zone, above or below 80 or 20;
2. Ignoring the Parabolic signals, while the other indicators provide the correct commands is associated with an increased risk of deposit drawdown.
Forex Smart strategy provides a relatively large number of trading signals on four-hour charts, and when all elements are arranged in the right order, you are likely to be able to predict the course of events. Observation of the market and practice will help you to notice patterns for making a profit.