Recently I noticed some real volatility with USD/AUD foreign money pair. Like most searching animals, as traders, our eye is at all times drawn to movement. I saw some alternative, so I’ve just lately been formulating an entry and exit signal for this pair specifically.
I spent a whole week, manually back testing this currency pair utilizing the 5, 15, 25, and forty five EMA’s (exponential moving averages) and have made some fascinating observations. This pair is horrible as a day trading proposition, nonetheless as a swing trade, this pair could be traded very successfully. I am seeing the AUD go south in the coming months and am very bearish, however I will merely make the decisions primarily based on what my chosen EMA tells me to.
Surprisingly, all EMAs examined in all intervals didn’t be proper more than 33.three percent of the time. The best was the 15 EMA while buying and selling it on a day by day bar chart. The top consequence was a whopping 22,000 pips profit for 12 months of trading. Think about in case you have been taking part in for $10 per pip! Not a bad result. This end result was mainly as a result of a particularly bullish run within the AUD/USD currency pair round August where the system collected a 14,000 pip trade.
You should consider that the back testing was finished, with completely no stop loss in mind. The concept of this, is that regardless of how massive your stop is, you possibly can at all times get whipsawed, significantly in a unstable transfer, and these are the ones we are attempting to find within the first place. I entered trades when the close of a each day bar was above the 15EMA and went long (if the close was smacked proper on the EMA I might ignore the sign)
I’m seeing a whole lot of volatility on this pair and it could possibly be a sideways combat arising, that are probably the most efficient Forex environments to lose your money, so I will wait until the pinnacle and shoulders formation totally kinds earlier than I dive in for a profitable trip south.
Mail this post
Posted in 
Tags: 
