What is the Snake Trading System?
The Snake Trading System is a popular forex trading strategy that uses a set of indicators to identify potential buy and sell opportunities in the market. It is based on the principles of trend following and uses a combination of moving averages, relative strength indicators, and other technical tools to help traders identify key levels of support and resistance. The system is designed to be easy to use and understand, making it suitable for traders of all experience levels. By following the rules of the system, traders can potentially increase their chances of success in the fast-paced and ever-changing forex market.
Snake Trading System Strategy
The Snake Trading System is a trend-following strategy that uses a combination of technical indicators to identify potential buy and sell opportunities in the forex market. The main indicators used in the system are moving averages and relative strength indicators.
Here’s an example of how the strategy can be implemented:
- Identify the current trend of the market: The first step is to determine the current trend of the market. This can be done by using a long-term moving average, such as a 200-day moving average, to identify the overall direction of the market.
- Use moving averages to generate buy and sell signals: The next step is to use shorter-term moving averages, such as the 50-day and 20-day moving averages, to generate buy and sell signals. A buy signal is generated when the shorter-term moving average crosses above the longer-term moving average, while a sell signal is generated when the shorter-term moving average crosses below the longer-term moving average.
Buy Signal
- The Snake Trading System generates a buy signal when the Snake indicator generates a bullish crossover signal.
- A bullish crossover signal occurs when the fast moving average (e.g. 7-period moving average) crosses above the slow moving average (e.g. 14-period moving average).
- The signal is confirmed when the price breaks and closes above a resistance level
- Traders can also consider the overall market trend, if it is bullish, this can add more confidence to the buy signal.
Sell Signal
- The Snake Trading System generates a sell signal when the Snake indicator generates a bearish crossover signal.
- A bearish crossover signal occurs when the fast moving average (e.g. 7-period moving average) crosses below the slow moving average (e.g. 14-period moving average).
- The signal is confirmed when the price breaks and closes below a support level.
- Traders can also consider the overall market trend, if it is bearish, this can add more confidence to the sell signal.
Snake Trading System Pros & Cons
Pros
- Simple and easy to understand: The Snake Trading System uses a straightforward approach that is easy to understand and implement, even for traders with little experience.
- Good for identifying trend changes: The moving averages used in this strategy are effective at identifying changes in trend, which can help traders to enter and exit trades at the right time.
Cons
- Lags behind the market: Because the Snake Trading System uses moving averages, it can lag behind the market, which means that traders may miss out on some early opportunities.
- May generate false signals: The confirmation from multiple indicators may not always be accurate, leading to false signals and potential losses.
Conclusion
The Snake Trading System is a technical trading strategy that uses a combination of moving averages and relative strength indicators to generate buy and sell signals in the forex market. This strategy has its own set of pros and cons, and it may not be suitable for all traders.
One of the main advantages of this strategy is its simplicity and ease of understanding, which makes it accessible even for traders with little experience. The strategy also excels at identifying trend changes, which can help traders to enter and exit trades at the right time. Additionally, by using relative strength indicators to confirm buy and sell signals, the Snake Trading System can help to reduce the number of false signals and increase the chances of success.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
