A new simple system based on movibg averages forexfactory

Here's a simple system based on moving averages that you can use on ForexFactory:

System Name: MA Crossover System

Time Frame: 1-hour chart

Indicators:

  1. 50-period Simple Moving Average (SMA)
  2. 200-period Simple Moving Average (SMA)

Rules:

  1. Long Entry:
    • When the 50-period SMA crosses above the 200-period SMA, enter a long position.
    • Set a take-profit target at the next resistance level or a predetermined distance (e.g., 20-30 pips).
  2. Short Entry:
    • When the 50-period SMA crosses below the 200-period SMA, enter a short position.
    • Set a take-profit target at the next support level or a predetermined distance (e.g., 20-30 pips).
  3. Stop Loss:
    • Set a stop loss at the previous swing high (for long positions) or the previous swing low (for short positions).
  4. Position Sizing:
    • Use a fixed fractional position sizing strategy, such as 2% of your account balance per trade.

Example:

Suppose you're trading the EUR/USD 1-hour chart. The 50-period SMA is currently at 1.1200, and the 200-period SMA is at 1.1150. The 50-period SMA has just crossed above the 200-period SMA, triggering a long entry signal.

You would enter a long position at the market price, set a take-profit target at the next resistance level (e.g., 1.1250), and set a stop loss at the previous swing low (e.g., 1.1120).

Advantages:

  1. Simple to implement and understand.
  2. Can be used on any currency pair and time frame.
  3. Provides clear buy and sell signals.

Disadvantages:

  1. May not work well during periods of high volatility or market uncertainty.
  2. May not capture all market movements, as it relies on the crossover of two moving averages.
  3. Requires discipline and patience, as it's a trend-following system.

Backtesting:

You can backtest this system using historical data to evaluate its performance and optimize its parameters. You can use a backtesting software or a spreadsheet to calculate the system's profitability, drawdown, and other metrics.

Remember to always use proper risk management techniques and to adjust the system's parameters to suit your trading style and market conditions.