TREND SURVEILLANCE SYSTEM ONLY WITH TWO MAs STREETS

First, we will use 70-period EMA. It sounds strange, before, no one has used the 70s before, but here are my statistics, I tested the EMA with different periods, but the 70 EMA is the best fit for this system.

The difference is that we will add two margins for this EMA according to parameters -7 and + 7. The setup looks like the chart below:


Please also add that this system works well for all timeframes, large frames trend to be less noise than small frames. The author likes to trade the M5 and M15 timeframe, so surely the small frame is still good.

Now, we need to install two more MAs and finish:

  1. 20 period EMA calculated at High price (to purple)
  2. 20-period EMA calculated at Low price (to yellow)

It's up to you what color you want to put, but I let it be easy to describe.

With these three MAs, the 70 EMA will act as a major trend indicator. There are two small EMA that will form an entry area for entry called Entry Range MAs.

It sounds complicated, but it's very simple, once the installation is complete, our chart should look like this:


Note that once again, this system is for trend trading. If the market doesn't have a clear trend, don't enter your command. At such times, you should find another pair or go out to play to save yourself from fretting.

Following will be the rules of entry

BUY COMMAND RULES

We will place BUY orders when we meet the following conditions:

  1. The price is below the 70 EMA and starts going up. Place an order when the first candle closes above the 70 EMA (of course it should be above both 20 EMA.
  2. If the price is above all MAs, you have to wait patiently until it returns to the zone created by the 20 EMA and rises again before placing orders.

Therefore, the area created by two MA20 lines is our place to order, as long as the 70 EMA still has a bullish indicator.

      3. There are two ways to place a stop loss:

        + If you are a cautious and risk averse trader, you should be trailing stop following the 70 EMA.

        + If you are a risky trader, accept a little drawdown to eat all the big wave, then trailing stop following EMA 20 Low (yellow)

Depending on the volatility of the market (you can use ATR to measure it), you will place a trailing stop 15 - 20 pips away from the MA.


SELL ORDER RULES

Similar to BUY rules, we will have the same SELL rules.

The last note, also the most important one: if you trade M15 or M5, you should only trade after 2:00 a.m New York time or in other words start in the European session.