What is a Surfing Strategy and How Do You Use It?

Posted by Jeremy Anderson Jun 23, 2021

Trading might seem rather complicated once you get started. There are, however, numerous strategies that make everything that much simpler. One of these strategies is the surfing one. Much like the name implies, it allows you to catch a wave and ride it. Unlike real surfing though, it also brings you a profit.

How does it work?

Most trading systems are based on moving averages (MA). This is an instrument that allows you to see the trend direction. It’s hot and difficult to use either. If you see that the price is below MA, the trend is descending and you should sell, and vice versa.

The surfing strategy is pretty similar to this concept as it uses exponential and regular MAs. On top of that, you also apply the RSI and you’re good to go. RSI is the relative strength index and is a common analysis instrument. Using the combination of these techniques and instruments allows you to closely monitor the price fluctuations.

Let’s look at the numbers

Another important thing to know is that the surfing strategy is intraday, so it should be used within small time intervals, like M30 or H2. In order to apply the strategy to your next trade, prepare all the required instruments and take a look at your chart. Make sure that all the indicators signal the same thing for you to be confident you’re about to make the right decision.

How do you know you should buy?

As previously mentioned, the strategy is intraday. Therefore, you can start analyzing the chart looking for an opportunity to buy as soon as the market opens. In order for you to be sure that you should buy, the following factors should align: the closing price should be above EMA 20, the RSI values have crossed 55 from below, and are above the SMA.

How do you know you should sell?

When you are looking for a signal to sell, you should be looking for the opposite of the “buying” signals. The closing price should be below EMA 20, the RSI values have to cross the level 45 from above and be below SMA 10.

Surfing Strategy

When is it time to close the trade?

Whenever you open a new position, it is crucial to determine beforehand where to put a stop order. If we are talking about buying positions, SL should be below EMA 20, for a selling trade it should be above EMA 20 accordingly. Meanwhile, keep in mind that you shouldn’t be risking over 2-3% of your capital no matter the position.

Alternatively, you can place a trailing stop which will allow you to close the position with a profit if the movement starts to reverse. The signal of opposite movement will lock your profit and close the trade.

One other approach you can use is waiting for the RSI to break through the SMA 10. Let’s say, we have a buying position and the RSI drops below MA. This will allow us to close the trade with a profit. If we are selling, we have to wait for the RSI to rise over the MA to receive profit from the trade. Typically, if there is a stable dynamic on the market, all signals will follow along. The fact that they are all indicating one thing allows you to make the right decisions regarding your portfolio.

Surfing strategy is one of the simplest approaches to trading. It’s not perfect but there is no strategy that is. If you’re only getting started, it’s a great way to learn about the market’s nature and make some money in the process.

The simplicity and efficiency of this strategy lie in the fact that it just tries to reflect on the general direction the market is taking. Steady trends provide opportunities for multiple successful trades. At the same time, attempts to reverse the trends are much more complicated and leave many beginners frustrated.

Follow the rules, and you’ll surely come out of the market with some profit. There are numerous approaches that have already been tested by millions of people. There is no need to look for new ways to trade which will undoubtedly cost you a lot.

One of the disadvantages this strategy has is the fact that you actually have to sit through the trades and monitor what’s happening on the chart. This doesn’t stop you, however, from opening long-term trades using another strategy of your choice.


Jeremy Anderson

He worked for NYSE American as a broker for over two years. Distinguished with high performance working with binary options and stocks of increasingly popular products.

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