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ADX-MACD Easy Forex Trending System

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This forex trending system is based on two standard indicators, the Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX). The strategy relies on a +Di -DI cross-over system confirmed by the MACD indicator for primary trend direction.

The strategy can be used on any currency pair and time frames above the 30 minutes.

Download link:

Click here to download the ADX-MACD Easy Forex Trending System

Forex Indicators:

2 Color MACD indicator (12,26,9)
ADX (30)

GBP/USD Hourly Chart Short Trading Example

gbpusd1houradx-macd-forex-t

Trading Rules

Long trades:

  • MACD trading above 0
  • +DI crosses above -DI
  • Place stop loss 3 pips below the most recent support level
  • Enter long trade at the candle’s close
  • Target level 1(T1) : Risk x 1.5
  • Target level 2(T2) : Risk x 3.0
  • Exit trade if MACD closes back below 0

Short trades:

  • MACD trading below 0
  • -DI crosses above +DI
  • Place stop loss 3 pips above the most recent resistance level
  • Enter short trade at the

    candle’s close

  • Target level 1(T1) : Risk x 1.5
  • Target level 2(T2) : Risk x 3.0
  • Exit trade if MACD closes back above 0

Now let’s explore the above short trade:

The example is a short GBP/USD Dollar trade on the 1 hour chart. In the above figure, MACD is trading below 0 (starting at 23 feb 2010). We wait until -DI trades above +DI for a short trade setup. Feb 24 2010, -DI crosses above +DI.

We enter a short trade at 1.5407. Our stop loss is placed 3 pips above the most recent resistance level at 1.5480. Total risk on this particular trade: 77 pips. Price objective T1: 77 pips x 1.5 = 115 pips. Price objective T2: 77 pips x 3.0 = 231. Both profit targets were hit.

Tip: Move stop loss on the remaining half position (T2) to break even once T1 target is reached, this creates a risk-free trade.


Category: Macd

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