KISS - Keep It Simple Stupid or the first band I ever saw. As I stated before on this Blog, I have been looking at the currency market trying to figure out a good way to swing trade them. Someone mentioned why not try the 9/14 EMA cross over? So I put the moving averages on the EUR/USD and it looks very good. The person stated "just do not automatically buy and sell when the averages cross but when they look like they are, use your brain". In other words, read the chart at the time.
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The chart goes back a year on a daily basis. If you started out that year long, then the first crossover looks to be about Christmas of last year. At that point, I would see there is a triangle pattern. I would give that pattern the benefit of the doubt. The trade would be to sell the long and go short about 1.3100 level.
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The next trade would be the rounding bottom in January and February where you would get long again in the 1.3000 area.
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The averages do not roll over until just above the 1.3500 area in mid May - nice gain of over 500 pips.
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You nearly get a signal the first week of June but should cover at the end of June around 1.3400.
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The next set of signals would have gotten you out around 1.3650 then short then long then short again for a couple of losses in July/August before finally getting you long at 1.3650 in mid-September.
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You would still be long today and a head by maybe 2000 pips or $20,000 per regular size contract. At a couple of times, you may have a $2000 loss or watch $3000 in profits disappear and you need to figure out a Black Swan Stop Lossbut could it really be this simple (talking to myself) stupid?
1 comment:
Hello Denarii,
Thanks for sharing nice idea with USD/EUR.
I've been trading this pair within 1 year channel with strong support and resistance. But obviously your is better. I exit to early when weak USD crossed over resistance and continue grow futher.
Vlada
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