Simple Trend Following Trading Strategy for GBPUSD with H1 Time Frame
This Simple Trend Following Trading Strategy for GBPUSD using the H1 Time Frame; work very well for trend traders.
And if you can keep to the simple rules then you will always be on the right side of the trend.
This strategy is simple because it uses only 2 standard indicator which is a 10 period SMA and 100 period SMA.
The Buy Signal happens when the 10-period SMA crosses above the 100-period SMA.
Likewise, the Sell Signal happens when the 10-period SMA crosses below the 100-period SMA.
We pair up a fast line and a slow line so that we are not that lagging as compared to using 50/100 SMA crossover.
Long: 10 SMA cross above 100 SMA
Short 10 SMA cross below 100 SMA
1 Hour Time Frame
4 Hour Time Frame
100 pips or when 10 SMA Cross 100 SMA in reverse.
Here’s how you want to set up the chart…
Firstly, configure your Moving Average as shown below…
One Moving Average set at 100 period SMA.
And the 2nd SMA set at 10 period SMA.
Select the GBPUSD forex pair and set the time frame to 1 hour.
You should have about the same chart like below…
When to Buy?
Every time when there is a crossover, then that’s the buy or sell signal.
When to Sell?
How About the Stop Loss?
Remember to set the stop loss at 50 pips from entry.
How About the Take Profit Target?
Fix it at 100 pips.
This will ensure that we will have a 1:2 risk: reward ratio.
How about the Winning Ratio?
When your risk reward is 1:2 which means one win can cover 2 losses, your win-loss ratio can be as low as 33% and you will still end up making money.
So imagine if you can just maintain a 50% win-loss ratio and that’s going to be really profitable in the long run.
Have fun experimenting with this strategy. It’s really simple. At the same time, highly effective.
The big question is will you allow it time to play out to your advantage?
Most of the time, it’s the trader that fails… not the strategy.
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