Dynamic support/resistance has always interested me throughout my trading career although it wasn't until recently that I discovered a couple of moving averages that seem to stop price in its tracks more often than not.
The 365 and the 150 exponential moving average have constantly been great trading tools for me. Plot them on your chart no lower than 4 hours and you will see how often price reacts to them.
You may be thinking 'that's great but how does that make me money?'
Let me explain. A system is nothing more than an edge, define a consistent edge and you have your self the beginning of a profitable system.
In our case we know there is a good chance that price will bounce off of one of the moving averages. All we need then is a trigger to enter the trade.
The best triggers are not lagging, I love to use price action in the form of candle stick patterns. My favorite being the engulfing candle.
Ok so now we have our entry (engulfing candle) we need an exit. I find that human nature always gets in the way of taking profit and there for I have the most success with trailing stops. There is no need for human interference and less chance that greed or fear will take control of the situation.
That is it you have your self a nice trading system, how do I know? Because I have traded this exact way for a while it works like a charm more often than not.
Remember always keep it simple in the forex market and you will succeed!
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