This system is based on Metatrader charting. The tools needed are the following:
- 15min EURJPY chart
- Heiken Ashi
- SMI [STOCHASTIC MOMENTUM INDEX by William Blau] First indicator window (Settings: 14,10,14,5) (Levels:+40,-40,0
- Stochastic Oscillator [This one in the second indicator window] (Settings: 10,1,7)Price field: close (MA method: simple (Colours: Main: Magenta and in signal type in none.)Levels: 20,50,80
- MA cross_over signal [arrow] (Settings 5,6)
- VQ [Volatility Quality] indicator by Raff (Setting:timeframe 0 ) (length 5,method 3,smoothing 3,filter 3 ) This indicator must be dragged from your navigator window down to your firstindicator window where your SMI is situated.
- Insert a 60 and 200 EMA on price chart.
Buy or long,the SMI must either be curling up from -40 or the Zero lines, the MA signal[arrow] must show on your chart and Heiken Ashi candle must be white.
VQ will show an arrow in the indicator window. Stochastic Oscillator must have moved up from the 20%line. Take profit when the SMI hits the +40 line or the candle hits the 60MA. Could be 30 to 50 pips.
For short or a sell, the SMI must be moving down from +40 line, stochastic must also be on its way down from 80% line and arrow of VQ and arrow of MA must have appeared.
Heiken Ashi must have turned red. Take profit when SMI hits the -40 line or a candle hits the 60MA. Another 30 to 50 pips.
Practice this first on a demo and check the TREND on the 1hr and 4 hr charts. Also check where the daily pivot levels are.
The daily pivots are support and resistance levels than can cause a reversal of trend. Take profit at these levels. You can always re-enter if it breaks through and opens a new candle above or below the pivot levels.
I trade this method personally on the EURJPY pair 15min chart,and bag 100 pips average a day.
All indicators are available from forex-tsd.
Please be aware of the risks of forex trading.
I suggest this system for daytraders that already have some basic knowledge of forex trading.