The good thing about weighted moving average trading system is you do not have to add more filter indicators in it. And the accuracy of this trading system is also very well. The strategy of this trading system is more simple and easy than other forex trading system. All you have to do is just follow the market trend when open a trading position.
Trading settings
Forex trading pairs:
- EUR/GBP
- EUR/USD
- You can use other currency pairs
Time frame chart:
- H1
- Or 30 minutes trading chart
Forex trading indicators:
- 18 days Exponential moving average indicator (red)
- 28 days Exponential moving average indicator (red)
- 5 days Weighted moving average indicator (blue)
- 8 days weighted moving average indicator (blue)
18 days EMA Exponential moving average indicator and 28 days EMA Exponential moving average indicator can assist you determine the first and last long term market trend.
5 days WMA Weighted Moving Average indicator and 8 days WMA Weighted moving average indicator can help you determine the first and last short term market trend.
WMA trading signals
- Open a trading position if the red lines are narrowing each other (18 and 28 days EMA)
- Open long trading position when the 5 and 8 WMA cross bullish the red channel
- Open short trading position when the 5 and 8 WMA cross bearish the red channel
- Close your buy trading position if the 5 WMA weighted moving average move bearish to 8 WMA Weighted moving Average
- Close your sell trading position if the 5 WMA weighted moving average move bullish to WMA Weighted moving average
- Close your trading position when the red channel is going to cross or when the red lines narrowing each other. This situation shows that the market price will change their direction
- You should be careful if you have an open trading position and the 5 and 8 WMA cross the red channel but the red channel is not narrowing. Because red channel will cross each other.
- You can open a trading position just after the red channel cross the moving average line, and close your trading position when they cross back
- Always place your stop loss order
Always prepare your risk management every time you get in the market. You can set your stop loss order based on risk and reward ratio. A good money management can brings you make money easier.
In the picture above, red channel narrowed and crossed each other. In this situation you can close your trading position and then open a new trading position in the opposite direction of the first trade.
If the red channel is not narrowing, you can keep your trading position open.
The image above shows a perfect trade, we can get big pips from it.
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