Last updated: May 8, 2025

Two MA’s and ADX Forex Trend following Strategy

It is a swing trend following forex strategy that uses moving average crossover. It works on 1 hour and 4 hour timeframe and applicable in all currency pairs.

Forex  Indicators:

• Moving average (MA smoothed) with period 9 (MA 9).
• MA with period 21 (MA smoothed 21).
• Average Directional Movement Index default setting (ADX 14). A level of 33 is added.

Rules for Two MA’s ( moving averages smothed) and ADX

Buy Entry:

• MA 9 must cross above the MA 21 and the ADX is greater than 33.
• Enter when the price comes back down to touch the MA 9.
• Set the initial stop loss 15 pips below the MA 21 and after 30 pips in gain move stop loss at the entry price (Time frame 60 min- for time frame240 move initial stop loss after 45 pips in gain)
• Profit target with ratio 1:2 stop loss or exit position when MA cross in opposite direction.

Sell Entry:

• MA 9 to cross below the MA 21 and the ADX is greater than 33.
• Enter when the price comes back down to touch the MA 9.
• Set the initial stop loss 15 pips above the MA 21 and after 30 pips in gain move stop loss at the entry price (Time frame 60 min- for time frame240 move initial stop loss after 45 pips in gain).
• Take profit with ratio 1:2 stop loss or exit position when MA cross in opposite direction.

This trading system is also good for trading with Options and Binary Options.

Buy Call or Sell Put Options

• Wait MA 9 cross above 21 MA and the ADX is greater than of 33.
• This event is an alert for Buy Call or Sell Put.
• Draw on the chart a line at the level of the previous High swing, this level is the strike or the fixed price.
• When the price comes back down to touch the MA 9 Buy Call or Sell Put with the strike at the level of the previous high.

Buy Put or Sell Call Options

• Wait MA 9 cross below 21 MA and the ADX is greater than 33.
• This event is an alert for Buy Put or Sell Call.
• Draw on the chart a line at the level of the previous Low swing, this level is the strike or the fixed price.
• When the price comes back down to touch the MA 9 Buy Put or Sell Call with the strike (fixed price) at the level of the previous low swing.