Overview of "Strategy 14" - Simple Trading Strategy:
Profitability is not the strongest point of this simple trading strategy, as the frequency of trading is really low. However, you may want to take into account that it hardly takes time and thus you may have other chances on the plenty of time saved. A combination of “14” and another intraday forex strategy should be considered to improve the benefit. In fact, it may yield a quite attractive profitability of 1.400 pips a year for a selection of specific pairs, given that the drawdowns for these pairs do not coincide.
The “14” Strategy is highly recommended for four currency pairs: EUR / GBP; EUR / AUD; GBP / AUD; GBP / JPY.
The following indicators are required for the chart:
- A Simple moving average SMA with a period of 14 (applies to low).
- A Simple moving average SMA with a period of 14 (applies to high).
- Exponential moving average EMA with a period of 200.
If you like Strategy 14, you might also like this shooting star candle strategy
Conditions for purchases in the “14” Strategy:
- The Simple moving average SMA 14 high is above the Exponential moving average EMA 200.
- The next day closes above Simple moving average SMA 14 high.
- At the opening of a new candle, place an order to buy.
- Stop-loss is set at a distance of 150 pips.
- Take-profit is set at a distance of 200 pips.
After passing 100 pips in the positive area, the transaction could be placed with a trailing stop. You can initially put it on a trailing stop at a rate of 100 pips.
Conditions for sales in the “14” Strategy:
- The Simple moving average SMA 14 low is below the Exponential moving average EMA 200.
- The next day closes below Simple moving average MA 14 low. At the opening of a new day candle, place an order to sell.
- The safety order - Stop-loss should be placed at a distance of 150 pips.
- Take-profit is established at a distance of 200 pips.
After passing the price of 100 pips from the opening point in the positive area, you should transfer the deal to the level of the lossless or you can initially put it on a trailing stop at a rate of 100 pips.
Important rules when applying this strategy:
- Opening one position at a time is a high recommendation.
- Don’t enter the market until the candle of confirmation is totally closed.
- All signals must be received after one trading day.
- The maximum risk for each transaction shouldn’t be more than 2% of your total balance.
Pros and cons of the strategy
- Provides easy-to-spot indicators for traders.
- Requires popular built-in indicators.
- Saves time for traders and investors with no regular charts review.
- Easy to install and follow.
- Provides a detailed guide to make the decision on buying and selling.
- Profitability is not very competitive against other strategies.
- Requires good emotion control.
- Applies to some currencies pairs only.
The “14” is an effective technical strategy with visual signs and simple-to-catch indicators. Coming with a huge advantage of the time factor, this strategy is incredibly suitable for traders who are busy with other tasks but still want to make money in limited time. Given a prudent approach combined with rigorous managing methods, making substantial profits in the long run with the “14” Strategy in restricted time is totally something you may get. Adding a quick note: to remember exactly the signal movements and adhere strictly to the mentioned rules are compulsory for a success in this market.