Only one indicator – Moving Average (MA) on closing, the period of which is equal to 40, is used during the process of trading using "Chariot" strategy.
Any currency pair, as well as all the timeframes, ranging from an hour and up to a week will suit for this strategy. A timeframe should be as big as possible.
The situation when the price is slowly increasing, happens very often in the process of trading, although it also happens that the price carries large movement in the totally opposite direction. This trading strategy has been designed to apply this kind of swings on a timely falling or rising market. Presented trading strategy is very simple, but it is considered to be effective if the price moves sideways or general upward/downward trend of the market.
It is preferable to use such strategy on the weekly chart, but it can also be applied on intraday and daily price charts.
Trading rules are quite simple. If the price is above the Moving Average, you should open long position (buy). In this case, the short positions are not opening.
If the price moves in the flat and ranges close to the moving average, it’s not recommended to open new positions.
While the balancing of the prices above and below the Moving Average, the opportunity to enter the market is given after the price "dives" out of the moving average (MA). If the candle, which precedes to the first entrance candle is located on the Moving Average and closing occurs in the upper half of the price range, then this is a signal that you are ready to open long position, but you should enter the market when the breakdown of the top by this candle takes place.
The position to buy should be opened if the price is placed above the moving average (40) and short positions – if below. Initially, the strategy involves only long positions.
Stop loss is best to be positioned at the level of the candle Low, which precedes the entry candle. Take Profit is not necessary to be placed as well as to use Trailing Stop. The bigger the time scale, the greater will be the value of trading. Similar option – is partially closing position, with the orientation for Fibonacci extension and levels, which are placed near.
Before opening the position, it is necessary to analyze the pricing schedule and make sure that there are price reversals within the SMA (40). Best of all, if the amplitude of such reversals is maximal, because it is the sign of incipient consolidation. Find not a very strong trend, not greater than 45 degrees. In the case of a larger trend steep price will be similar to the SMA (40). When it moves away from this figure, it’s better not to open the positions. The essence of strategy is to follow the trend after the kickbacks. To avoid a break, you can use an additional oscillator ADX.
Everyone chooses the most suitable strategy for him. However, in any case, you should test all the popular and common strategies, because you can find the one that will bring you a steady income.