Surfing Strategy – Recommendations from Professional TradersThursday, 22 February 2018 13:31
Surfing Strategy is a trend trading method for working in the Forex market. It was developed as scalping, but later it was revealed that the mid-term trade the system is also suitable.
The name itself speaks of the fact that you need to follow the wave. In fact, it means that according to this strategy transactions are opened in the direction of a strong trend. Auxiliary tools are several indicators that clearly reveal the moments for opening positions.
Surfing System Settings
The author of Surfing Strategy recommended using his system on the M15 timeframe. However, it does not exclude the possibility of working on longer periods.
Regarding the choice of currency pairs, there are no restrictions, but it’s better to choose highly volatile assets – they are more often in trend and yield more profit. It is better to trade during high activity of a chosen asset.
For example, EUR/USD is more volatile during the American and European sessions – that’s the time when you need to work according to Surfing Strategy.
Indicators for Surfing Strategy
Only two technical tool are required: RSI, Exponential Moving Average. Draw the latter one on the chart four times like this:
- Two exponential moving averages with a period of 20, which are formed according to the Low and High values. These are green and red lines, respectively;
- Two more EMA with the same parameters of indicators’ formation, but with a period of 10. These are dotted lines of the same colors.
As for the RSI indicator in Surfing Strategy – first, apply it with a period of 10, setting the levels of 45 and 55. Then, apply the EMA 10 line to the RSI.
Open BUY positions when the price broke through the green moving average from the bottom up, after which it closed above this line. RSI should break through the level of 55, after which – fix above the smoothed curve.
Once this has happened, you can follow two ways. Open a Buy order, as soon as the new candlestick appeared or set a pending Buy Stop order in several pips up from the signal candlestick.
Calculate the lower border, to which the price (Stop Loss) can drop in 20-30 points below EMA20 (Low) - the red line. The more volatile the pair, the greater the distance should be measured. For the EUR/USD, according to the rules of Surfing strategy, 20 points are enough.
Signals for the sale of an asset are a mirror purchase. Count Stop up according to the same rules as when buying, but use the red EMA strip.
Exit the Market, according to Surfing Strategy
The position can be closed by Stop or Take Profit. Set the last order two times more than Stop.
Also, during a manual trailing, you can exit when you want. Accompanying the position, follow the EMA10 indicators.
The followers of exiting on indicator signals can close positions when RSI crosses the smoothed curve. Remove a Buy order when crossing from top to bottom, a Sell order - on the contrary.
Trading on Renko Charts
After testing results, Surfing strategy showed great performance on the Renko charts. If you chose this method for trading, take into account that you should close positions when the opposite bricks appear.
It is better to open a deal when the chart formed the bricks, at least, of three pips. To master the work with the Surfing strategy and for trading on Renko charts, in particular, use a demo account for testing.
In contrast to such systems as Surfing, there are many strategies against the crowd (for example, the Stress Free TDI System), which call to work in the opposite direction from the most of traders. They also have a good profit, suggest trading highly volatile pairs, but differ in the set of technical tools and, in fact, the main idea.
To understand which strategy is more acceptable for you - Surfing or Stress Free TDI System, test both on a demo account.