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To trade the «Intraday Setup 100%» forex strategy, put 2 simple forex indicators on the daily chart of any currency pair; both are built into any MetaTrader 4 terminal: a simple moving average with period 20 (SMA 20) and 2 sets of Bollinger Bands with deviations of 2 SD and 3 SD.
Forex BROKER rating >> (reviews, analytics, news)The rules for opening buy trades with the «Intraday Setup 100%» forex strategy are:
1. Put the 20-period SMA on the daily chart and make sure the (closing) price is above this simple moving average.
2. Only buy trades in the direction of the trend are opened.
3. Then switch to the hourly chart and add 2 sets of Bollinger Bands. The 1st pair of Bollinger Bands has a deviation of 3SD, and the 2nd pair has a deviation of 2SD.
4. When the price breaks down and then closes back above the lower 3SD-2SD Bollinger Bands channel on the hourly chart, enter the market.
5. Place the stop-loss order at the swing low minus 5-10 pips and calculate the risk of the trade (risk = entry price — stop-loss level).
6. Then set the profit target (take profit) for the first 50% of the position at a distance of 50% of that risk (i.e. if your risk on the trade is, say, 40 pips, you take profit 20 pips above the entry price).
7. As soon as the first profit target is reached, move the stop loss on the remaining part (the second 50% of the position) to breakeven (zero). You can also use a trailing stop for the second part.
8. The second part (50% of the position) is closed as soon as the price closes below the upper 3SD-2SD Bollinger Bands channel, unless the trade has already been closed by the stop loss at breakeven.
The rules for opening a sell trade are:
1. Put the 20-period SMA on the daily chart and make sure the (closing) price is below the simple moving average.
2. Only sell trades in the direction of the current trend are opened.
3. Then switch to the hourly chart and add two sets of Bollinger Bands. The 1st pair with a deviation of 3SD, the 2nd pair with a deviation of 2SD.
4. When the price breaks up and then closes back below the upper 3SD-2SD Bollinger Bands channel on the hourly chart, enter the market with a sell.
5. Place the stop-loss order above the swing high plus 5-10 pips, then calculate the risk of the trade (risk = stop-loss level — entry price).
6. The profit target (take profit) for the first 50% of the position is at a distance of 50% of the risk taken (i.e. if you risk, say, 40 pips on the trade, close the first 50% of the position 20 pips below the entry price).
7. As soon as the first profit target is reached, move the stop loss on the remaining 50% of the position to breakeven (zero).
8. The second part of the position is closed as soon as the price closes above the lower 3SD-2SD Bollinger Bands channel, unless it has already been closed by the stop loss at breakeven.
This forex strategy has been tested on the real market more than once and works very well! The main thing, of course, is not to forget where the price is relative to the daily SMA 20.
Video: the «Intraday Setup 100%» forex strategy: