Last updated: May 8, 2025

Direction Movement Index Forex Trend Following Strategy

This is a trend following strategy based on the trend indicators. It works best on 15 minute timeframe and applicable to EU, GU, AU and UCHF.

Forex Indicators:

• Directional Movement Index (D+ D-, 14 periods),
• 5 Weight moving Average (close),
• 11 Simple moving Average (close),
• Parabolic Sar (0.1 0.01)

Rules for Direction Movement Index with MA Trading System

Long Entry:

• 5 WMA is greater than 11 MA,
• PARABOLIC SAR below the candles,
• ADX DI+ positive is greater than DI- negative.

Short Entry:

• 5 WMA is less than 11 MA,
• PARABOLIC SAR above the candles,
• ADX DI- negative is greater than DI+ positive.

Reentry Rules:

• SAR gives a signal again in the older direction of the trend.
• The crossover of the moving average determines the trend.

Exits and Stop

• Parabolic SAR signal in opposite direction,
• Profits are discretion for you (examples for profit: Pivot point’s levels, or predetermined profit target).
• Initial stop loss at the previous swing