Short Term Momentum Forex Trading Strategy

Short Term Momentum Trading Forex Strategy for traders who lack patience…Do you want a forex trading strategy that turns into a profit within minutes of entering into a trade? If you are a trader who lacks patience in your trading and want to see your trade turn into a profit within minutes of your entering into it then read on. There are traders who lack patience and can’t see their trade initially go into a loss before turning into a profit.

For these type of traders short term momentum trading is the best forex trading strategy. The aim of this short term momentum trading strategy is to hit the profit target as early as possible. This is achieved by entering the market long or short when the momentum is on your side.

In this short term momentum forex trading strategy, we will be using the 20 day Exponential Moving Averages (EMA), the 100 day Simple Moving Average (SMA) and the Moving Average Convergence Divergence (MACD). The exponential moving average places more weight on the recent price action as compared to the simple moving average which is what we will need in this short term momentum trading strategy.

20 day EMA will be the trigger to enter into the trade. The 100 day SMA will make sure that we enter only those trades that are in line with the main trend. MACD will be used to filter out low probability trade setups by gauging momentum. We will be using the default settings for the MACD that are First EMA=12, Second EMA=26 and the Signal EMA=9.

Look for a currency pair that is trading below the 20 day EMA and the 100 day SMA. You will wait for this currency pair to start trading above the two moving averages by at least 15 pips. Enter into a long trade if the MACD has turned positive no more than 5 candles ago. This is done to make sure that you enter into the trade when the momentum has just started to build and is not maturing. Place the stop loss at the low of the candle that broke above both the moving averages. As soon as the trade turns profitable by the amount risked exit half your positions and trail the remaining position with a trailing stop with 20 day EMA minus 15 pips!

In case, the currency pair is trading above both the 20 day EMA and the 100 day SMA, wait for it to trade below both the moving averages by at least 15 pips. Enter into a short trade within five candles of the MACD turning negative. Place a stop loss at the high of the first candle that broke above both the 20 day EMA and the 100 day SMA. Wait for the trade to turn profitable by the amount risked. Exit half of the position and trail the remaining position with a trailing stop with 20 day EMA plus 15 pips! Get these Forex Bully Multiplier and Identifier Indicators FREE! Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade!

0 Comments