Introduction
Forex Factory’s SMA 88 352 strategy is designed to help traders make profitable decisions when trading the price chart. Developed by Walter Peters, who is an experienced forex trader & co author of Naked Forex, this strategy focuses on two specific currency pairs (EUR/USD and GBP/USD) and uses two specific time frames (4-hour and 15-minute) for analysis. In comparison to other trading strategies, this one focuses on tracking and monitoring big price movements, rather than engaging in frequent trades. It also introduces forex traders to the concept of “risk and reward,” using a predetermined stop loss and take profit levels. Below we break down the main components of this strategy and provide an overview of how it works.
The Basics of SMA 88 352 Strategy
Price Analysis
Trading with the SMA 88 352 strategy starts with the price chart. Traders are guided to use two separate time frames, the 4-hour and 15-minute, to identify potential trade setups. Price prediction is where understanding the effects of different chart patterns and other technical indicators such as support and resistance lines come into play. With the SMA 88 352 strategy, traders use two technical indicators, the 18-period simple moving average and the 88-period Stochastic oscillator. The combination of these two indicators in both time frames is meant to help predict market reversals.
Money Management
For successful execution of the SMA 88 352 strategy, traders need to learn how to effectively manage their money. Here, risk management is of the utmost importance. The predetermined stop loss and take profit levels specified by Walter Peters in the strategy help ensure that the risk to reward ratio is maximized. Along with the take profit and stop loss, traders are also encouraged to practice proper money management by limiting their exposure to no more than 3-5 trades at any one time and ensuring that each trade has a maximum of 2% risk of their total account equity.
The Benefits Of SMA 88 352 Strategy
The SMA 88 352 strategy is a popular choice for many traders because it is straightforward and easy to understand. It offers an intuitive system that helps traders make effective decisions without complicating their analysis. Because it follows the concept of “risk and reward,” it also helps traders minimize their risk while maximizing their potential rewards. Lastly, because this strategy focuses on two specific currency pairs and two specific time frames, traders don’t have to be overwhelmed with too much information or data to analyze.
Introduction to the Forex Factory SMA 88-352 Indicator
Forex Factory SMA 88-352 is an interesting indicator. It uses the traditional Simple Moving Average (SMA) and adds an extra and unique angle. By using two different SMAs, one that follows price action and one that follows swings, it helps traders to identify trends and spikes in the market. The combination of the two SMAs helps traders gain a better prediction of the currency movements. Additionally, it helps traders gain insight into potential reversals, and entry and exits points that suit their strategies.
Applying the Forex Factory SMA 88-352 Indicator
The best way to make use of the Forex Factory SMA 88-352 indicator is to apply it within the context of other technical indicators and chart signals. With the combination of the SMA 88-352 and other indicators such as support and resistance levels, or even common patterns such as channels or breakouts, traders can better understand the direction of the market and when to enter or exit a trade. It can also help to identify market reversals that could signal potential turning points in the market.
Benefits of the Forex Factory SMA 88-352 Indicator
There are many benefits to using the Forex Factory SMA 88-352 indicator. Firstly, it is a quick and easy way to identify potential market trends and reversals. Furthermore, it is easy to apply, requiring minimal effort or experience and can be used in any type of market. Additionally, it helps traders identify entry and exit points that may suit their strategies. Furthermore, the combination of two moving averages can provide a better understanding of the current market direction. Finally, it can help traders to better time their trades and increase their success rate.
