My Trading System

The system I use for my trades is simple and is based on multiple moving averages.

I use four moving averages that I watch in two clusters: a fast cluster formed by the MA(9) and MA(14) and a slow cluster formed by the MA(50) and MA(200). The slow cluster provides support and resistance for the fast cluster where it coincides with other indicators (such as support and resistance formed by channel boundaries or other trendlines). I use a MACD that is a 5-period SMA of my fast moving average cluster (so the MACD is (9, 14, 5)) to indicate short-term market movement tendancies. I also use volume to add support to diagnoses.

Here are the conditions I look for to find (potential) trades:

1. The moving averages are interpreted as usual: when a fast MA crosses a slow MA there is an opportunity;
   
2. When the fast MA cluster crosses the slow cluster, the opportunity signaled is even more important;
   
3. When the MACD line in relation to the signal line is in agreement with the cross-over, it adds to the certainty of the signal;
   
4. Trade volume increases my confidence when I see a trend forming

I watch M1, M15 and M30 charts during my trade and I incorporate H1 and H4 (sometimes even dailies) when researching the trade before entering a position. My trades usually last between 45 minutes and two hours (which makes me a "daytrader").

I heavily employ candlestick patterns to find good entry/exit points for my trades. If all the technical indicators line up correctly during a down-trend, a hammer formation followed by a strong bullish candle is an easy decision. Sometimes, if I'm nervous, I'll wait for the price to regroup nearby (and maybe toss in a Fibonacci retracement) before getting into the market in the direction of the original trend.

My system dictates my stoplosses and takeprofits as well: my stoploss is always placed a maximum of 3.5 times the spread away from my entry point. So, for example, if I enter a position long on EURUSD at 1.2025/28, my stoploss can be no lower than 1.2015. My takeprofit point is 2-3 times my stoploss.