Hi fellow swing traders, here is a swing trading system which you can use to trade the GBPUSD currency pair.
This swing trading strategy has the potential to average more than 100 pips a month.
You just have to manage your risks and it can be a real killer forex swing trading system for you.
Ok, enough of trash talk, lets get started with a bit more detail into the GBPUSD forex swing trading strategy.
Overview of the 4Hr GBPUSD Swing Trading Strategy
(1)With this forex swing trading system, you need to use the 4hr chart as well as the daily chart to make a trading decision.
(2) You also need to have these forex indicators, slow stochastic with the settings(13,5,5) applied to both charts, EMA 4, EMA13, and EMA 50 on the 4hr chart.
(1) On the 4hr chart, open a trade at market order or with a pending stop order on the new opening candlestick when 4ema first croses 50Ema followed by 13Ema
(2)Your stop loss should be 50 pips.
(3)Exit the trade when 4EMA reverses and crossed 13EME on the next open candle.
(5)Last but not the least, you need a good filter to filter out potential bad trade setups with this swing trading system. Here’s what you need:the stochasticks indicator on the daily chart:
For Valid Long Entry: Slow %K above Slow %D on the Daily Chart
For Valid Short Entry: Slow %D above Slow %K on the Daily Chart
Note: the %K&%D on the stochastics are the two line on the stochastic indicator chat that cross each other based on where price is going.
The reason why you need to use the stochastic on the daily chart is pretty simple:follow the trend. The daily chart has more importance than the 4hr chart.
(6) Take profit: there is not take profit option here(dummy!) because you need to refer to rule (3)!
Now if you are still confused, these two charts below will make things a bit more easier for you to understand. Click on the charts if you need to see it more clearly.
Now as trade filter, swith to daily chart to see if the two stochastics lines have crossed to the downside to confirm the overall direction of the trend(in this case, its a downtrend):
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