Forex Strategy Training


By Casey Stubbs

Having the right forex strategy is a big part in being a successful trader today I am going to share a strategy that works well and is easy to execute. I have had some recent information about money management so I felt that it was time to switch gears and talk about strategy. I had a conversation with a trader that used this strategy to increase his account by over 450% last year so you will want to pay attention to this one.

Here are the rules:

Risk 1% of total account value on all trades

Identify the trend on 4 hr Chart and trade within the trend.

1 to 3 Risk Reward Ratio. Let my winners run and cut losers short.

Use a 3 EMA and a 30 EMA 25 EMA. When the 3 EMA
crosses above or below the 30 that is when you enter. Wait until the candle closes.

Open 3 lots with a stop just above the high on the the candle you enter on. Adjust stops as
the trade moves in your favor.

Use MACD with 12,26,9 settings the purpose of the MACD is to exit trades.
When the lines on the MACD Cross after you enter that is when you exit 2 lots two take profit.
Keep the 3rd lot open to let the profits go on more.

Here is a chart that shows an example:












Here is a video that I share the forex strategy.


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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.

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  • Don Amos

    HELLO CASEY,WHEN I ENTERED THE MACD  ON MY CHART ONLY ONE LINE GRAPH INSTEAD OF TWO APPEARED.WHERE DID I GO WRONG?
    REGARDS
    DON AMOS

  • Edwin

    Hi Casey

    Happy New Year, can I check if the above strategy be used on a 1hr time frame?

    Regards

    Edwin

  • Fredyaap

    Andrey,
    are you saying you use the Stochastic instead of the MACD? So you don’t even have a 
    MACD up at all?

  • Fredyaap

    can you send the two line Macd to me.
    Thanks,

  • Fabian

    Hi thanks for sharing this, is simple and easy to follow, I just have one question, which chart time frame you use to trigger the sign? or any below the 4h chart? sorry i am at work and i cant see the video!

  • Jackmorrinson98

     what platform do you use?

  • Alan

    It seems to me that MT4 dispalys the MACD line as a histogram and the signal line as a line. What is displayed as a histogram on a conventional MACD indicator does not appear at all. If so the strategy still works on MT4 – you simple treat the outer edge of the histogram as though it were a line and take the exit signal when it crosses the signal line. Not quite so easy to see but the information is there. Should you be in doubt the numbers are in the top left hand corner where there are two numbers after where it says MACD(12,26,9). The first of these numbers is the MACD and the second the signal so it is possible to confirm whether they have crossed or not.

    Separately, Casey’s video does not follow the stragegy as written in that he takes ever cross as an entry signal rather than follow the first line of the stragey which advises to trade within the trend. Looking at both approaches, using the trend as a filter seems to give a considerable improvement in the reliability of the entries but gives far fewer entries. A possible compromise would be to take all signals but be very quick to trail the stop when the signal is counter trend to minimise the loss or take a small profit if the trend resumes.

  • Anil Gupta

    This seems to be the strategy followed by Michael storm, which I have read in his articles and seen in his videos. Really a very good strategy that needs to be mastered and which I am sure is going to be profitable carefully without any emotions attached to it. Anyhow we have not seen any article / video from Michael storm for a long time i.e. after 24th feb 2011. Please its my request to  Michael storm to produce an article , particularly about EUR/USD pair future outlook , as I have been strongly following this for a long time.

  • Rjherdman

    Thanks for the the teaching Casey,they say that;s the secret to kiving to be old.It;s keeping the mind busy.I can see us all now in our 80’s still trading!

  • Sandy

    This sounds very interesting. But what is the exit strategie for the 3rd lot?  Is it totally discretional?  It seems that in most cases by the time the macd crosses the trend has already reversed, so the 3rd may suffer a loss that would wipe out the gain of the first 2 lots, right?

  • Arm239

    Good strategy. Shall I Enter on the same time frame ie 4 Hr time frame or lessor?

  • Arm239

    In Metatrader shows only one ma lines. You can download MACD ( with two mas) indicator from forex factory.
    Raman

  • Ttlray

    Hi Casey, thank for sharing, i’m always following.. , this really work, i open 3 short position on USDJPY on demo account this morning and is now profiting a total of 60pips already,  still going and need to find an exit point later. I read some news that also say that China is going to buy the Japan Gov. bond. That give me confident also. Tks Casey. Cheers and happy trading.

  • Kuatkhin

    Hi Cassey, thanks for the strategy you presented. I am a bit confused what you mean by following the trend for entry on 4h chart. looks like in the example you have short entry when the trend is up, please clarify. Thanks

  • Lyndon

    Just a clarification. When setting up in MT4 the moving average wants a period and a shift.
    Should the numbers in both period and shift sections be 3, 30 and 25?

  • Adigwu john

    just send ur email and I’ll send the two line macd to u for those who don’t have.

  • Alan

    Casey,
     
     Does this work on the 1 day chart?

  • Thanks for sharing that is a big help. I dont use metatrader so I do not know. How do you make an ea for it so easy?

    Thanks

    Casey

  • Brysown1

    I looked this over (yes I use MT4 as well)…changes: add RSI (3) ON 15M > MACD window at bottom of chart.
    Both EMA’s (25 &30) set a LOW price of day
    3EMA set  >  High price
    2 positions, closing 1st at RSI / MACD signal line cross
    2nd (not so simple as Trend Direction will factor in)..use RSI rules of over bought/over sold (70) fade down…looking for cross again.
    I’m setting this up on an EA and demo it out…Manual trade it looks good

  • wikaniko

    Looks good and I want to demo it, but  the video doesn’t quite relate to the text which is confusing.
    The instructions say to trade within the trend, yet the video doesn’t seem to. The chart diagram doesn’t seem to be a clear trend either. So I can’t see the relevance of trading within the trend. Please explain as it could cost a lot of money if I get it wrong.
    Also, on the video text it says ‘with a stop just above the high of the two hour candle’ – I guess you mean the 4 hour one?

  • Wayne

    What platform are you trading on that has a MACD with 2 lines

  • Zan123123

    Hello,
    thanks Casey to share with other traders.I have question is it possible to get email,skype or any contact info of that member/trader who using that method.I have few questions for him….
    Thanks
    Best regards
    Zan

  • Great Idea thanks for sharing.

  • Andrey

    Hi Casey. A 7,3,3 Stochastic is giving the same signal as your double line MACD. This is a alternate exit indicator for those that can not get the second line on the MACD.

  • Kalonjifire

    thank u for sharing will be trying this out on my demo first… but it looks profitable over time

  • That is how my charting platform works

  • try making the lines bigger.

  • I dont know if it can be done in the mt4 platform.

  • I use the close

  • Mt4 only has one line.

  • It only has one line on the mt4 platform I did not realize it because I trade on the a different platform.

  • yes

  • Mt4 only has one line.

  • I am not sure what you mean?

  • Just to have a double band.

  • Steve you will just have to have find another exit strategy

  • I dont know why the Mt4 Macd is like that.

  • The 25 Ema is used as a double band yes you could use just the 30 ema. If you wanted to.

  • ray

    why are you using the 25ema?  Wouldn’t it be enough just to use the 3 and the 30 ema?

  • Dozzy

    pls what is wrong with forex power indicator since past three day the daily indicator only show NZD down trend only,so what is happen?