SEA TRADING SYSTEM

Overview of The Sea Trading System

The Sea Trading System, developed by Russ Horn, is a versatile Forex trading strategy designed for use across various timeframes and currency pairs, especially major pairs like EUR/USD and GBP/USD. The system is named for its reliance on indicators that trigger signals when they fall below or rise above their middle levels, resembling a sea level.

System Components & Indicators

  • Bollinger Bands (20,3)
  • 3-period Exponential Moving Average (EMA)
  • MACD (6,17,1)
  • 14-period Relative Strength Index (RSI)

Chart Setup

  • Bollinger Bands (20,3): Apply with a 20-period, 3 standard deviations, on the closing prices.
  • 3-period EMA: Apply with a 3-period on the closing prices.
  • MACD (6,17,1): Set with a Fast EMA of 6, Slow EMA of 17, and MACD SMA of 1.
  • 14-period RSI: Apply with a period of 14 and a level set at 50.

Buy Rules

  • 3-period EMA crosses above the Middle Bollinger Band.
  • MACD crosses above the 0 level.
  • 14-period RSI crosses above the 50 level.
  • Place a buy order when all conditions are met.
  • Stop Loss: A few pips below the nearest swing low or the Lower Bollinger Band, whichever is closer.
  • Take Profit: At the Upper Bollinger Band or a fixed target, depending on the timeframe:
    • M1: 3-5 pips
    • M5: 5-10 pips
    • M15: 15-20 pips
    • M30: 25-30 pips
    • H1: 40-60 pips
    • H4: 80-100 pips
    • D1: 150-200 pips

Sell Rules

  • 3-period EMA crosses below the Middle Bollinger Band.
  • MACD falls below the 0 level.
  • 14-period RSI moves below the 50 level.
  • Place a sell order when all conditions are met.
  • Stop Loss: A few pips above the nearest swing high or the Upper Bollinger Band, whichever is closer.
  • Take Profit: At the Lower Bollinger Band or a fixed target, depending on the timeframe.

Example Trades

Long Trade Example

  • Chart: GBP/JPY H4
  • Entry: When RSI crossed above 50, MACD above 0, and 3 EMA above Middle Bollinger Band.
  • Buy Order: At 126.283
  • Stop Loss: 80 pips below the entry, at 125.483
  • Take Profit: 100 pips, at 127.283

Short Trade Example

  • Chart: EUR/USD H1
  • Entry: When RSI crossed below 50, 3 EMA below Middle Bollinger Band, and MACD below 0.
  • Sell Order: At 1.30512
  • Stop Loss: 15 pips above the entry, at 1.30662
  • Take Profit: 40 pips, at 1.30112
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