Topic: how to set up this strategy
The logic is first looking at 4 hr for the main trend, but I will not trade in the 4hr chart. If 4hr. chart is trending up, then I will only be looking to go long on the 15 minute chart. On the other hand, if my 4hr. chart is trending down, then I will only be looking to go short on the 15 minute chart.
4hr. Chart Settings:
· 5 EMA applied to the close
· 10 EMA applied to the close
· Stochastics (10,3,3) (Use slow and simple settings)
· RSI (9) (Simple)
After establishing the main trend , then look for trade entries on the 15 minute chart. The 15 minute chart looks similar to the 4hr. chart, except for the fact that have added a MACD histogram. The trade entry rules are :
15 Minute Chart Settings:
· 5 EMA applied to the close
· 10 EMA applied to the close
· Stochastics (10,3,3) (slow and simple settings)
· RSI (9) (Simple)
· MACD (12,26,9) (Exponential histogram)
Long trades:
· 5 EMA must cross above the 10 EMA
· RSI must be greater than 50
· Stochastics must be headed up and not in overbought territory
· MACD histogram must go from negative to positive OR be negative and start to increase value.
Short trades:
· 5 EMA must cross below the 10 EMA
· RSI must be less than 50
· Stochastics must be headed down and not in oversold territory
· MACD histogram must go from positive to negative OR be positive and start to decrease in value.
Stop loss for long trades:
the lowest point in the last 2 hours
Stop loss for short trades:
The highest point in the last 2 hours