Forex MT4/MT5 Indicators Forex Indicators & Strategies Download
The 20 SMA with RSI Forex Trading Strategy is a very simple and easy to follow forex trading strategy that is based on two very well known technical indicators, which are the 20 Simple Moving Average (SMA) and the Relative Strength Index (RSI).
The 20 SMA is used as a trend filter in this strategy and the RSI Buy Sell is used as a momentum indicator to help confirm the trade entries. This strategy can be used on any time frame from the 1 minute charts up to the monthly charts.
20 SMA with RSI Forex Swing Trading Strategy
The trade entries are very simple, when the price is above the 20 SMA, then we only look for buy trade opportunities and when the price is below the 20 SMA, then we only look for sell trade opportunities.
The RSI is used as a confirmation tool and we only take Smart Money Index trades when the RSI is above 50 for buy trade entries and when the RSI is below 50 for sell trade entries. The stop loss for this strategy is placed a few pips below the most recent swing low for buy trade entries and a few pips above the most recent swing high for sell trade entries.
The profit target for this strategy is typically set at 2 times the risk for each trade. This is a very simple and easy to follow forex trading strategy that can be used by any level of trader.
How to Use the 20 SMA With RSI Forex Trading Strategy
- The 20 SMA with RSI Forex Trading Strategy is a very simple and easy to use forex trading strategy that anyone can use.
- The 20 SMA with RSI Forex Trading Strategy is based on the fact that the RSI indicator is a leading indicator and the 20 SMA is a lagging indicator.
- The 20 SMA with RSI Forex Trading Strategy is a trend following strategy.
- The 20 SMA with RSI Forex Trading Strategy is best used on the 5 minute timeframe.
- The 20 SMA with RSI Forex Trading Strategy can be used on any currency pair.
20 SMA And RSI Chart Setup
The 20 SMA with RSI Forex Trading Strategy is a very simple and easy to follow forex trading strategy that is based on two very commonly used technical indicators in the market, the 20 Simple Moving Average (SMA) and the Relative Strength Index (RSI).
As the name suggests, the 20 SMA with RSI Forex Trading Strategy is all about using these two indicators to trade the market.
- The 20 SMA is used as a trend filter in this strategy. This means that we only take trades in the direction of the overall trend as indicated by the 20 SMA.
- The RSI is then used as a confirmation tool. We only take trades when the RSI is above 50 (in an uptrend) or below 50 (in a downtrend), confirming that the trend is indeed strong.
- This forex trading strategy can be used Currency Power Meter Indicator on any time frame from the 1-hour chart up to the monthly chart.
- The beauty of this strategy is in its simplicity. Because it is based on just two indicators, it is very easy to understand and implement.
- Another benefit of this strategy is that it can be used to trade all kinds of market conditions ranging from trending markets to range-bound markets.
- Lastly, because the 20 SMA with RSI Forex Trading Strategy only takes trades in the direction of the overall trend, it is a very low-risk trading strategy.
If you are looking for a simple yet effective forex trading strategy, the 20 SMA with RSI Forex Trading Strategy could be just what you are looking for.
Risks of the 20 SMA With RSI Forex Trading Strategy
The 20 SMA with RSI Forex trading strategy is a simple yet effective short-term trading strategy that can be used by all levels of traders. The strategy is easy to follow and can be used on any currency pair and timeframe. However, there are a few risks associated with this strategy that you should be aware of.
- One of the biggest risks is that the 20 SMA can be a lagging indicator. This means that it can take a while for the moving average to catch up to price, which can result in false signals.
- Another risk is that the RSI indicator is not always accurate. It can sometimes New VWAP Indicator give false signals, which can lead to losses.
- The third risk is that this strategy relies heavily on price action. This means that if there is no clear trend, the strategy will not work.
- The fourth and final risk is that this strategy does not take into account fundamental analysis. This means that you could make a losing trade even if the fundamentals of the currency pair are in your favor.
20 SMA crosses 50 SMA
Despite these risks, the 20 SMA with RSI Forex trading strategy can be a Best MT4 profitable strategy if used correctly. If you are new to trading, it is always best to test out any strategy on a demo account first before risking any real money.
