Introduction.
I first started trading when I was 15. I was fond of the stock market, but due to my limited capital, I could only buy one share. When I eventually choose the stock I wanted, It didn’t go up or down. It just kept bouncing around. In the end, I sold the stock with a 5% loss.
I was still following the stock market, but I decided for myself I needed something more volatile with more leverage. I discovered options, futures a CfD’s. But they still were too unpredictable.
Eventually, I found my holy grail: Forex. I read all that I could read about it and made some first profits. I discovered the power of something as simple as the BGX system or Vegas.
I started studying these methods more closely and realized that these simple models could make you very profitable in the long run.
Over time, I started to adapt the systems to my own rules. The biggest advantage of the Sidus Method is that it is not necessary for adding extra filters. Whipsaws will occur, but less frequent.
This system made my trading very profitable as it easy to understand, easy to implement and easy to find the right entry points.
What do you need?
- 1H (of 30MIN, but you will get wore whipsaws) candlesticks/bar charts
- 18 EMA & 28 EMA (put them in red)
- 5 WMA (in blue) & 8 WMA (in Orange )
The 18 EMA & 28 EMA are two red lines who form a tunnel, these will help you to determine the start of a trend and the end of a trend.
The 5 WMA & 8 WMA will show you when to enter a trend, they will also help you to see the strength of the trends.
Entry Signals:-
! You should only open a position when the red tunnel is extremely narrow or crossed!
LONG: 5 WMA & 8 WMA cross the red tunnel upwards.
If the 5 WMA also crosses the 8 WMA upwards, then the signal is extra strong.
SHORT: 5 WMA & 8 WMA cross the red tunnel downwards.
If the 5 WMA also crosses the 8 WMA downwards, then the signal is extra strong.
Exit Signals:- Signals that show the end of the chosen trend:
- Long: The price has reached a top and 5 WMA dives under 8 WMA Close position
- Short: The price has reached a bottom and 5 WMA jumps above 8 WMA Close position
Always close your position when boundaries of the red tunnel cross each other or when they become so
narrow that they are one! This is a clear sign of a trend reversal. After you see this, close your position
and open a new position in the other way (If you were long, close, open a short position)
When in a trade and the 5 WMA & 8 WMA cross the red tunnel -> Pay attention! As long as the red
tunnel boundary's doesn’t cross each other there is no problem, but often this is a sign that they will!
Basic rule
!!!Enter a position were the red tunnel boundaries cross and exit that position when they cross again!!!
!!! Always use a stop loss - I recommend a 10-15 pip stop loss !!!
Remarks
Money management is THE holy grail of forex trading! Please think about this and implement it. If you use this system it will give you nice rewards, but use money management to give you larger returns!
This method was manually back tested in real time on EUR/GBP and EUR/USD. I can only say it works for
these pairs, as I didn’t test with others.
Linkback: https://www.forex.zone/trading-systems/10/best-forex-system-ema-and-wma/457/