Moving Average Bounce Strategy (SMA 7 & 50) – Simple Trend Trading System
We trade price bounces on the moving average only by following the trend.
Download and keep the free PDF of the complete strategy here
This strategy opens trades as soon as a trend change is confirmed by a bounce on the SMA 7.
The signal is opened only in the direction of the main trend indicated by the SMA 50 Moving Average.
Configuration
We operate on the Pocket Option OTC market because it offers payouts up to 92% and is always open 24/7.
Let’s open the Pocket Option chart.
If you don’t have this broker yet, you can sign up using this link:
(Universal Pocket Option link valid for all countries)
and, if you’d like, claim the 50% bonus coupon.
We select 92% OTC assets.
By highlighting the yellow stars, we keep the assets ready at the top of the chart for quicker selection.
Let’s set the chart parameters.
1 minute candles and expiry 1 minute to the end of the candle (flag)
Chart Setup
We use:
1-minute Japanese candles
Expiration: 60 seconds (candle close)
Pocket Option OTC chart (92%)
SMA 7-period Moving Average
SMA 50-period Moving Average
Let’s get ready for trading
After installing the indicators with the recommended parameters and colors of your choice, this is what the trading chart looks like:
In the figure, we see two SMA moving averages.
the 7-period one in yellow and the 50-period one in blue.
To begin, let’s identify a situation in which prices follow a well-defined trend.
As you can see in the figure, prices tend to bounce off the moving average.
The period of the moving average is 7.
The YouTube video contains practical examples to help you master the strategy.
Entry rule
The price approaches, touches, or slightly exceeds the moving average.
The trade is opened during the movement of the candle, with expiry at the close of the current candle
(1-minute flag expiry selection).
Caution:
Do not open positions if there are less than 30 seconds left before the candle closes.
Open positions only in the direction of the trend according to these rules:
CALL opens if:
The candles are above the 50-period blue moving average
The moving average curve has a bullish direction
Example:
PUT opens if:
- The candles are below the 50-period blue moving average.
- The moving average curve has a bearish direction.
Example:
Attention:
If the curves have conflicting directions (for example, one goes up and one goes down), no positions should be opened, as shown in the figure:
Position opening
As soon as the candlestick reaches the vicinity of the 7-period moving average (yellow line),
the position is opened with expiry at the candlestick close
(flag timer selection).
If there are less than 30 seconds left before the candle closes,
the position is not entered.
Call opening example.
PUT opening example
Support and Resistance
When support or resistance levels are present, the price may not follow our forecasts.
To easily draw these lines, you can use the Zig Zag indicator, drawing lines that pass through the swing points.
Comments and suggestions
The strategy is valid for any time frame. It works well if you respect the proportions.
For example:
5-minute candles
5-minute expiration
However, this requires patience while waiting for signals.
– Avoid low-volatility markets
(small candles that barely move).
– Trade when the market is active.
– Do not trade during sideways market phases.
– If you lose a couple of trades in a row,
stop and analyze the situation — something may be wrong with your trading.
Start with a demo account, then use a small amount
just to test the market and ensure everything runs smoothly.
Gradually increase your stake.
Do not invest more than 5% of your capital in a single trade.
1% or 2% is a reasonable choice.
Conclusion
We hope you find this system simple yet effective for generating profits.
Watch and rewatch the video examples on YouTube
to fully understand the rules.
Like and subscribe for updates.
Your comments would also be greatly appreciated.
Thank you and Happy Trading!
New Pocket Option Universal Link
50% Bonus (Optional)
New Pocket Option Universal Link
50% Bonus (Optional)