Two Windows Forex Strategy

In this paper, we introduce you to a simple strategy that was used in the Russian futures market, but can be used in the forex. This is a simple forex strategy «Two windows». This simple forex trading strategy is based on trendsledyaschey system with filters to find the best entry points. Let us consider the example of this strategy in the futures on the RTS index. For this, we need a system of two windows. One is the time schedule in the other - minute.

Indicator parameter

Local schedule

Apply to the time schedule two exponential moving averages (CC) with a period of 34. First we take a moving average of the minimum value, and the second - the maximum.



The resulting graph with applied indicators will serve us a filter to determine the trend and direction of transactions. How does it work? When the candles are below both moving averages - we will be open positions only for sale when moving up - only for purchase, unless the moving - and the purchase and sale, depending on the signals from the minute chart.



Minute chart

Let us examine what indicators we need to minute chart. To start the exact same plot the moving average, as well as on the hourly chart. And added two exponential moving averages with periods of 70 and 140.



Now we have a ready set of two windows. It remains to figure out how to interpret its signals.

The Signaling

To begin to define the hour schedule for the purchase or sale transaction will be opened. Here we see that the trend is up, it means that minute schedule waiting for the 70th and 140th moving averages also show an uptrend. To open a position we need to close the first white candle is above both the 34th minute moving averages on the chart. And at the closing price of the candles we are opening buy. Stop-loss is set at 200 points lower (60,330 open positions, the stop loss is set at 60,130.)



A profit target set at 800 points higher (61 130). Thus, we get a very good risk to reward ratio of 1 to 4. With the passage of price in the direction of our trade at 200 basis points (to 60,530), reduce the stop-loss by half, that is, we put it up to 100 points (portable to 60,230).



When passing rates by 200 basis points (to 60,730), move the stop loss to break even, that is, to the point of opening positions (60,330).



When you close a position on take-profit, to the end of the trading day of transactions for the selected symbol will no longer make. If the position was closed by stop-loss, waiting for the next signal (that is, when a white candle again close above 34-moving average, and if you change the direction of the trend). Similarly, open and closed positions. That is a signal to sell a black candlestick closing below the 34th minute moving averages on the chart in a downtrend in both chart windows. The example below shows that the black candle closes according to the required conditions (on the hourly chart downtrend on a minute - the closure of the candles below 34-SS). Was open for sale at a bargain price of 61 655, stop loss may be for 61,855. After passing the price down by 200 basis points (to 61,455), the stop loss order was extended to 61,755. After some time, the deal was closed on the stop loss. A little later opened another deal to sell a new signal (at a price of 61 610). The deal closed on Take Profit costs 60,810.



If the hourly chart uptrend and on a minute - down, all the sell signals are ignored. If the hourly - downtrend, but on a minute - is up, then ignored signals to buy. That is considered a priority area on the hourly chart. When the hourly chart candles are between the moving averages, the open positions can and to buy, and to sell, depending on what signals are at this time with minute chart.