Next, would like to share with you a trading strategy with a very simple principle, applied on frame D1 with extremely potential profits. The indicators used for the trading strategy are also very close to you. Without further ado, let's go to the trading principles part of the strategy.

A few important notes in trading chart setup

  • Time frame: D1
  • Currency Pair: Any
  • Technical indicators: SMA 150, Stochastic (8,3,3) and RSI (3).

You set up your chart as instructed above. Then we can start looking for signals to trade.

Trading principles

For buy setup

  • The first condition is that the price must be above the 150 SMA, indicating that the market is in an uptrend.
  • After satisfying the first condition, we test the RSI indicator. The RSI must be below the 20 level, indicating that the market is in oversold conditions, there is a possibility that the market will reverse to the upside. This is letter 2 condition.
  • Next we test Stochastic. On the Stochastic there should be a crossover of the 2 lines and this crossover must occur below the 30 level. This is the third condition.
  • When all three conditions above have converged, now the trader can open a long position when a new candle appears.
  • The stop loss is placed below the nearest bottom and the stop loss can be moved away from the trend. Move below the newly created low as the trend continues.
  • For taking profit, traders can place in 2 ways:

  1. That is using Stoch. When the lines in the Stoch indicator cross above the 70 level. At this point you can exit.
  2. Exit when the price reaches the weekly pivot point or hits a strong resistance level on W1 or on the D1 frame.

As shown below are the possible buy signals with this trade setup:


Contrast with sell setup.

For sale transaction setup
  • The first condition is that the price must be below the 150 SMA, indicating that the market is in a downtrend.
  • After satisfying the first condition, we test the RSI indicator. The RSI must be above 80, indicating that the market is in overbought conditions, there is a possibility that the market will reverse to the downside. This is letter 2 condition.
  • Next we test Stochastic. On the Stochastic there should be a crossover of the two lines and this crossover must occur above the 70 level. This is the third condition.
  • When all three conditions above have converged, the trader can now open a short position when a new candle appears.
  • The stop loss is placed above the nearest top and the stop loss can be moved to follow the trend. Moves above the newly created top as the downtrend continues.
  • For taking profit, traders can place in 2 ways:
  1. That is using Stoch. When the lines in the Stoch indicator cross below the 30 level. At this point you can exit the order.
  2. Exit when the price reaches the weekly pivot point or hits a strong support level on W1 or on the D1 frame.
This is a strong trend trading strategy, but avoid trading in a sideways market and remember to have adequate capital management as the stop loss will be quite large.