Forex 20 Pips Price Range MA Trading Strategy Explained

20 Pips Price Range MA Strategies - 20 Pips Trading Systems Strategies

The 20 pips price range moving average trading strategy is used with the 1 Hour chart & 15 minute chart. On this chart time frames we use the 100 and 200 simple moving average technical indicator.

Both the 1 Hour and 15 minute chart time frames will use the 100 and 200 SMA (SMA Indicator) to determine the direction of the trend.

The 1 Hour chart time frame checks the longterm direction of the trend, upwards trend or downward trend, depending on the direction of the moving averages. All trades taken should be in this trend direction.

We then use the 15 minute chart to find the optimal point to enter trades. Forex trades are opened only when the price is within 20 pips range of the 200 simple MA, if price is not within this 20 pip range trades are not opened.

Forex Uptrend/Bullish Market

To generate buy signal (bullish signals) using the 20 pips moving average strategy, we shall use the 1 hour and 15 minute chart time frame.

On the 1 hour chart time frame the price of the chart should be above both the 100 and 200 simple moving average. We then move to a lower chart time frame, the 15 minute chart time frame to generate a signal.

On 15 minute chart time frame, when price reaches the 20 pips range above the 200 SMA, we open a buy trade and place a stop loss 30 pips below the 200 SMA. Stop loss can be adjusted to the amount of Pips that are suitable for your risk but to avoid being stopped out by normal Forex volatility its best to use 30 pips stop loss.

A buy trade can also be opened when the price touches the 100 Simple moving average, provided it's not very far from the 200 SMA. Normally the 100 SMA will be within the 20 pips range of the 200 SMA.

100 & 200 Simple MA Trading Buy Signal - 20 Pips Moving Average Trading Strategy

Sell Signal - Forex Downtrend/Bearish Market

To generate sell signal (short signals) using the 20 pips moving average strategy, we shall also use the 1 hour chart time frame and 15 minute chart time frame.

On the 1 hour chart time frame, the price should be below both the 100 and 200 SMA. We then move to the 15 minute chart time frame to generate a trading Signal.

On 15 minute chart, when price reaches the 20 pips range below the 200 SMA, we open a sell trade and place a stop loss 30 pips above the 200 simple moving average.

100 & 200 Simple MA Trading Sell Signal - 20 Pips Moving Average Strategy Method

With this strategy method price will generally bounce of these support and resistance levels because many traders watch these levels, and open similar trades at around the same point.

These support and resistance levels act as short term resistance or support levels within the price charts.

Profit Taking level For This Trading Strategy

With this strategy the price will bounce & make a move in direction of the original trend. This move will range from 60 - 70 pips.

The best trading profit taking level would therefore be considered to be 60 to 70 pips from the 200 SMA.