Type: Directional swing trade technique
Time frame: Four-hour charts
Indicator one: 20-period EMA
Indicator two: 20-period CCI
Markets: GBP/USD, EUR/USD, USD/CAD, USD/CHF, AUD/USD, NZD/USD, EUR/GBP, GBP/JPY
Buy rule: In an uptrend, buy when the CCI is below –100 (oversold) and price has touched (or threatened to break below) the EMA, which would be acting as support.
Sell rule: In a downtrend, sell when the CCI is above +100 (overbought) and price has touched (or threatened to break above) the EMA, which would be acting as resistance.
Stop loss: 100 pips
Profit target: 300 pips
Position sizing: 0.01 lots for each $1,000 (making it 0.1 lots for each $10,000) or 0.1 lots for each 10,000 cents in a cent account (making it 1.0 lots for each 100,000 cents).
Risk per trade: 1%
Risk-to-reward ratio: 1:3
Breakeven: Move your stop loss to breakeven after you have gained 100 pips or more.
Trailing stop: You may apply a custom-set trailing stop of 100 pips after you have gained about 200 pips or more.
Exit rule: Exit when the initial stop, breakeven stop, trailing stop or profit target is hit.
Maximum signals/week: As an additional risk control measure, refrain from taking more than 10 trades with this strategy during one week.
Mustapha Azeez is a professional forex trader, strategist, fund manager, researcher and coach. He is a senior analyst at FX Instructor LLC. Email him at firstname.lastname@example.org.