Forex Trading Tricks Using DeMarker (2)

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Forex Trading Tricks Using DeMarker (2)

This article is the 2nd article on this blog that discusses forex trading strategies using DeMarker technical indicators, or commonly called DeM. If you do not know this indicator, I suggest reading the first article discussing this DeM. The article describes basic knowledge of DeM and how to read it. Regular traders use DeM to estimate overbought and oversold conditions and of course also to estimate when it’s time to open or close a position.

Usually the way to use DeM is to pay attention to the overbought and oversold areas provided by this indicator. But remember, like other technical indicators, DeM cannot guarantee that the signal will be 100% accurate. That’s the bad news.

The good news is that the signals that appear are usually consistent enough to give traders clue to make decisions and take action. Of course, later your ability to recognize and interpret signals that emerge from DeM – as indicators / trading systems in general – will only experience improvement through experience.

Okay, what do you think if in this article we try to build a simple trading system using DeM? If you agree, please continue reading this article to completion.

You need to remember that the trading system described here is for educational purposes only. You will see some examples of setup or “trading signals” shown in the example, but (as we have understood Together) remember that results in the past are not a reflection (let alone a guarantee!) That this system will produce exactly the same achievements come.

Setting this simple trading system is:

  • DeMarker period 14
  • Period 14 Exponential Moving Average (EMA)

Okay, now we discuss the “usage rules”.

Rules that apply to buy signals:

  1. Wait until DeM drops to the oversold area, then wait until the DeM curve returns to “cut” above level 0.3.
  2. Wait until the price cuts above the 14 EMA (the candlestick must be closed).
  3. When conditions 1 and 2 have been fulfilled, then you can open long positions.
  4. Place stop-loss (SL) in a significant support area.
  5. For profit targets, you can choose to put “take profit” (TP) with a 1: 1 risk-to-reward ratio against SL, or let prices move until they cut back below EMA 14.

Examples like what you can see below:

If you choose to let profit flow until the price returns to cross below EMA 14, for example as in the following picture:

Rules that apply to sell signals:

  1. Wait until DeM goes to the overbought area, then wait until the DeM curve returns to “cut” below level 0.7.
  2. Wait until the price cuts below EMA 14 (remember: the candlestick must be closed first).
  3. When conditions 1 and 2 have been fulfilled, then you can open short positions.
  4. Place SL in a significant resistance area.
  5. Place TP with a 1: 1 risk-to-reward ratio against SL, or let the price move until it re-cuts up to EMA 14.

Examples like what you can see below:

If you choose to let profit flow until the price returns to cross over EMA 14, for example as in the following picture:

One more thing you need to know is that in general, trading systems that use moving averages usually cannot work well in a sideway market.So you must always pay attention to how the market conditions when you will implement this system.

Well, it’s simple right ? Likewise, you must keep in mind that there is always a risk that accompanies each transaction. That means you can experience loss at any time. For that you must always be wise to use capital and place SL in each transaction.

Good luck.

Previous : Forex Trading Tricks Using DeMarker (1)

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Forex4Live.com is a forex trading system website that started to be published since 2011 and has been used by thousands of traders around the world. The system is very simple and accurate, priced at $ 167 for a lifetime membership with no monthly fees or hidden fees. Our team created this system by testing thousands of indicators then selecting 23 indicators and combining them into one great trading system.
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  1. Forex Trading Tricks Using DeMarker (1) | Forex4Live No Repaint Forex Signal2 months ago

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