Identifying Forex Trades With The Fozzy Forex Trading System

Forex Trading System

Ok, so by now I will assume you have setup your metatrader chart as per my last post.

The Fozzy Forex method is used on a daily chart. We don't place our trades until the start of a new bar or candle. About 10 minutes before the end of the days candle we want to start scanning the pairs we trade. What we are looking for is the RSI line to cross the MA line. Once this has happened we enter on the opening of the new candle/bar. Below is a picture with that arrows showing where the RSI crossed the MA.


As you can see both these trades would have gone onto make a nice number of pips. The first one in excess of 100 pips. The second would have made at least 200 pips, maybe more if you had guts to stay in it.

There has been a lot of discussion about the stops needed in the Fozzy forex method. The original setup used the previous days high or low as the stop but I personally feel this can either sometimes be too high or too low. I now use ATR (Average True Range) with a setting of 20 to set my stop. I found this to give enough free movement required for trading a daily method without over stretching yourself.

Taking profit or when to take profit has been the subject of some debate and there are several ways to go. In my next post I will go through some of the possibilities.

Forex Trading System