In my loss making days I experiment with different trading strategies to bring me back in profit and this approach has helped me develop some trading styles which are quite reliable to bring decent profit while keeping the risk low. In this article I'll share one of such trading strategy which takes only 2 % risk of capital allocated for any individual trade and still manages to bring in return of more than 20 % (annualized). Also you don't have to worry about a string of continuous losses wiping account clean with 2% at a time as on average it does fewer than three trades in a month.
Idea in Nutshell
So I hope you would eager to get into details of it without any further delay. It's developed using the combination involving EMA of 10 candle period and EMA of 20 twenty candle period. It basically tries to identify the direction of trend of underlying instrument and then gauge the relative strength of that trend. It has been designed such that it is supposed to avoid taking trades in days of narrow sideways movement and trade only when there is a strong price action on a particular side caused by any fundamental or technical factors. So let's look into the design aspect…
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