Long-term trending strategies are always considered traders’ best weapons to deal with market fluctuations. Today, we would like to introduce to you a trend-following system composed of two famous indicators Moving Averages and Relative Strength Index, mainly applied on the long-term charts. That strategy is named “One Look”.
What a particular name, right? The One Look strategy was invented mostly for swing and seasonal Forex traders, who aim to trade the market’s grand trends. That’s why it’s called “One Look” – instead of constantly looking at the trading platform to seek opportunities, traders just need to glance sometimes. Like any trend-following strategies, this strategy is also constituted of lagging and leading indicators. Two Exponential Moving Average (EMA) – an extremely popular lagging beacon – are used here to highlight trending conditions and find trading signals. About the leading guide, it’s the Relative Strength Index – a perfect product of legendary technical analyst Welles Wilder. This indicator is also called RSI, having the main function to determine market momentum and overbought/oversold zones. There have been a lot of effective combinations between the EMA and the RSI, and this One Look strategy is one among them.
The setting of this strategy is as follows: • Two Exponential Moving Averages. One is set of 5, and the other is set of 10. • A 21-period Relative Strength Index.
The win ratio of the One Look is so far confirmed at 85.66% after being tested for 15 months. According to the testing result, this strategy works best on the daily chart. Despite the fact it could be applied to any financial assets, even cryptocurrency pairs, we suggest mainly using it to find signals on the EUR/USD.
How to trade Forex with the One Look
One of the things makes this strategy appreciated is its simplicity. All the abovementioned indicators are in-built in FinmaxFX’s MT4 platform, so that you just need to set up following the guidance.
A bullish occasion is confirmed when the following requirements are met: • The 5-period EMA turns above the 12-period one. • The RSI line crosses above the 50 level.
On the contrary, a bearish signal is identified when the following conditions are satisfied: • The 5-period EMA closes below the 12-period one. • The RSI line turns below the 50 level.
Of course, there are some terms when trading with this strategy. They are as follows: • The candle of confirmation must be fully close before any trading decisions are made. • Only one position should be entered at a time. • You should place the stop loss 50 pips away from the entry point. The take profit point will depend on the risk/reward ratio you target (it has to be at least 1:1). When prices move towards the expected direction about 30 pips, the stop loss should be transfered to the breakeven point.
Pros and cons of the One Look strategy
Pros • Simple, flexible and effective. • Deliveries reliable signals by strict entering rules. • Allow traders to capture long trends and gain huge profits • Doesn’t requires a constant observation. Cons • Requires a high level of patience.
Long-term strategies are always our top priority when recommending to traders. With a high accuracy in addition to a variety of advantages mentioned above, we consider the One Look one of the best in our long-term strategies collection, and the best strategy for newcomers to start with. However, we would like to reiterate that there are no 100% winning systems, and this One Look is not an exception. Please don’t forget to use risk controlling and psychology managing methods when trading with it.