Here is a very basic overview of a role of a Stochastic indicator in the Forex trading. Knowing exactly what to expect from Stochastic, if you ever plan to add it to your own system, will affect trading results dramatically. For this trading method: Currency pair: Any.Time frame: Any.Indicator: Stochastic (14, 3, 3) Entry rules: Buy when the faster moving Stochastic line crosses above and up over slower moving stochastic line. Exit rules: Sell when the opposite situation (next crossover) occurs and right after that open an opposite position. It is again recommended, once the first touch of Stochastic lines (possible future crossover) has been spotted, to wait until the following price bar on the chart has closed and only then take actions. Advantages: can give entry and exit rules, easy to use. Disadvantages: Stochastic is a lagging indicator – with this lines crossover system it can create a lot of false signals. Traders may want to change Stochastic regular settings for each particular currency pair to eliminate as many false signals as possible. Stochastic crossover system is good when used in combination with other indicators.
Pair = EUR/USD onlyTime Frame : 15 Minute OnlyZoom out to 50 or 75 percent to see the magic. And the secret is... MACD! Set it to 35 45 30. The Rule is, ENTRY WHEN CROSSING. ITS so simple!! Check the picture below! Patient is the key, and you may sometimes checkout the Histogram Divergence to spot next cross. Don't forget to set trailing stop (SL+), Avoid News, Cut Loss when MACD cross again (almost never happen)
Forex systems which adopt a Stochastic indicator for monitoring the price provide some very good tips about the situation on the market for traders that are willing to see it. Currency pair: Any.Time frame: Any.Indicator: Full Stochastic (14, 3, 3) Entry rules: When Stochastic has crossed below 20, reached 10, and then crossed back up through 20 – set BUY order.Entry rules: Sell when Stochastic has crossed above 80, reached 90, and then crossed back down through 80. Exit rules: close trade when Stochastic lines rich the opposite side (80 for Buy order, 20 for Sell order). Advantages: gives quite accurate entry/exit signals in well trending market. Disadvantages: needs periodical monitoring. Stochastic is suggested to be used along with other indicators to eliminated entering on false signals.
Trading systems based on fast moving averages are quite easy to follow. Let's take a look at this simple system. Currency pairs: ANYTime frame chart: 1 hour or 15 minute chart.Indicators: 10 EMA, 25 EMA, 50 EMA. Entry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELL in the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the current price bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals). Exit rules: option1: exit when 10 EMA crosses 25 EMA again.option2: exit when 10 EMA returns and touches 50 EMA (again it is suggested to wait until the current price bar after so called “touch” has been closed on the opposite side of 50 EMA). Advantages: it is easy to use, and it gives very good results when the market is trending, during big price break-outs and big price moves. Disadvantages: Fast moving average indicator is a follow-up indicator or it is also called a lagging indicator, which means it does not predict future market directions, but rather reflects current situation on the market. This characteristic makes it vulnerable: firstly, because it can change its signals any time, secondly – because need to watch it all the time; and finally, when market trades sideways (no trend) with very little fluctuation in price it can give many false signals, so it is not suggested to use it during such periods.
H4 Bollinger Band Strategy Tools : Bollinger Bands(20)TimeFrame : H4Currency : ALL This strategy is extremely simple and I use it to detect opportunities and it is very good. If you open an H4 EUR/JPY chart and you insert the Bollinger Bands(20) indicator, if you observe the chart you will see that the bands are simply a Resistance and Support. The Upper band is a Resistance and the Lower Band is a Support. If you pay attention to the chart you will see that most of time the price hit the upper band then it retraces back to Lower Band, so how I trade is very easy, I wait till the price touches let’s say the upper band and closes under it (not above it) and wait till the candle is formed, when it finishes and the next candle opens under the previous Upper band then I enter a Short trade with target = 100 pips or until it touches the Lower Band Same thing when it touches the Lower band and the candle closes above it, and the next candle opens above the previous Lower Band then I go Long with Target = Upper band or 100 pips. You can develop this strategy as I did, and you can profit a lot, I made more than 800 pips this month. H4 Bollinger Band Strategy (Part II) Tools : Bollinger Band(20)TimeFrame : H4Currency : ANY First open a currency (per example EUR/USD) and H4 timeframe, issue suitable breaklines from the bollinger band , now wait till a candle breaks the breakLine. This break is not a trade signal we must have an extra confirmation, here come the role of the bollinger band. look at the bollinger band upper and lower, if they are both opened which means upper band is UP and lower band is DOWN, then it is a confimation of a trade.
Creating a support/resistance tunnel on the price congestion and trading on the break of this tunnel is a milestone of Forex trading discoveries. This trading system/approach needs no indicators and can be applied to any currency and traded in any time frame where coiling in a tight range is spotted. Entry rules: Find consolidation on the chart and draw two horizontal trend lines – support and resistance. Once the price breaks trough one of the trend lines and a current price bar closes outside the tunnel – buy/sell in the direction of the breakout. (If price pierces the trend line, but did not close outside the tunnel, cancel the previous trend line and draw another one according to the new conditions). Note: also very often happens that once the price makes it through support or resistance it rocks down/up very quickly and so, more aggressive entry can also be adopted – without waiting for the current price bar to close. Exit rules: not set, however, it is believed, that the price after breaking the tunnel will travel the distance equal to the width of that tunnel. Advantages: very simple and extremely effective. It can provide 100% profitable entries if short profits are taken - usually with the close of the first candle right after the entry. Disadvantages: very accurate and well thought entry point should be picked. Orders placed very close to the tunnel can be triggered by sudden whipsaw early before real breakthrough occur.
Every one says keep it simple and the trend is your friend. This is as simple as it comes and it utilizes daily trends in the Forex. Currency pairs: ANYTime frame chart: DailyIndicator: SMA (I use a 30 SMA on most my charts but the idea is to choose a SMA that gives you the best looking trends.) Entry / Exit rules:Crossing the SMA in either direction, in other words you reverse your position when ever the price crosses the SMA Money Management:2% of your account per trade 1 open trade per pair with a stoploss of 1/2 % of your account (even though the idea is to reverse your trade every time the price crosses the SMA, there will be times that you’re not going to be there in front of your computer and in those cases you will need a stoploss to ensure your account only takes a small loss. Advantages: This is a trend following system and the Forex does trend. Disadvantages: In periods when the market is not trending there will be a lot of little losses. (For me, this is price I pay in order to catch a big trend.
Sooner or later all Forex traders begin experimenting with different EMA settings.Quite often very interesting combination can be spotted. Here is one Simple Forex system based on 50 EMA indicator. Any currency pair.Time frame: 90 minute or 3 hour chart, 4 hour chartIndicator: 50 EMA. Entry: watch for a candle to pierce 50 EMA and finally close above (to enter Long) or below (to go Short). Enter with the second candle after it makes 5 pips higher than the previous one. Exit: not set. Stop loss order: 15 pips below 50 EMA.
GBP/USD when it is 1 hour to london open, draw lines on the highest high since midnite and lowest low since midnite, just trade the breakout and let ur stop loss be at the high of the candle that broke the low line for short trade and the low of the candle that broke the upper line for long trade if u experience a breakout before New York Open, please target the first 30pips if beyond New York Open before a break please target between 10 to 20 pips
I have been working on a very simple trend following system. It requires no indicators..... only a trend line. Some functions are going to be automated to address my weak points. I am in the process of getting someone to write it now. Basic strategy: Trendline placed and named (something simple BBB for buy SSS for sell)Necessary to identify what should be followed. trade opened automatically in direction of trendline once price has moved 5 points above trend line in a BUY or 5 points below line if a SELL. This provides a degree of safety should the trend not go as planned. Stop loss automatically set at 5 points below entry for a BUY, and 5 points above for a SELL. Again, a safety point. Trade will stay active until trendline is broken by X number of points (configurable) or if the stop loss is triggered. Trailing stops not needed. It's already handled in the functions. An audible alert when trade is closed. Can be used for times you can stay and play or longer trends when you cannot. I have looked at about 1500 indicators and a lot of EA's and none were worth anything. All lagging or don't work right. Play with that stuff if you like but I'm taking a simple, fast, accurate approach. I'm looking for a way to eventually automate the process with something that will automatically draw the trend lines but that is still being researched. If anyone knows of a good, stable one, please let me know.
Timeframe: I use it on 4 hours, feel free to use it on smaller timeframes as well Currency Pair: Any Indicators: EMA9 and EMA26 and DMI (Directional Movement Indicator with ADX) DMI Settings: Draw a horizental line at 25 to watch for the crossovers of DI+ or DI- ADX Settings: Ignore signals where ADX is lower 20 GO LONG WHEN: EMA9 has crossed over EMA26 DI+ >= 25 ADX >= 20 ADX is in between DI+ and DI- EXIT LONG WHEN: EMA26 has crossed EMA9 AND DI- is higher than DI+ GO SHORT WHEN: EMA26 has crossed EMA9 DI- >= 25 ADX >= 20 ADX is in between DI- and DI+ EXIT SHORT WHEN: EMA9 has crossed EMA26 AND DI+ is higher than DI- WHAT TO IGNORE: While in Long Position: DI+ and DI- Cross-overs while the EMA9 is still on top of EMA26 While in Short Position: DI+ and DI- Cross-overs while the EMA26 is still on top of EMA9 While searching for Trading Opportunities: The EMAs has crossed over but the DI+ or DI- (depending on whether you're looking for Long or Short positions) are still under 25. Also, wait till the ADX has reached 20 before entering into Trade Price breaking the Lower EMA (EMA26 in case of Long Positions) line while the EMA9 is still on top of EMA26
Time Frame : 15mins and aboveIndicators : Average Directional Movement Index - ADX (Settings : 14) and Fractals Background on Fractals and ADX? ADX Indicator or Average Directional Movement Index gives you a reading of how strong the market is trending. We will use this to our favor and combine it with Fractal Indicator to pick a high probability trade. These indicators can be found by default in your indicators list on your Metatrader 4 platform. Fractals show peaks and dips. To explain it easier, a Up Arrow Fractal forms when there is a lower high on both sides of a candle. A Down Arrow Fractal forms when there are higher lows on both sides of the candle. Please note that fractals will only form when the candle closes with the given criteria of high lows or lower highs on both sides. Understanding The Fractal Guru Strategy When the ADX is trending by seeing the blue line rising steadily, we look for Fractals to jump in the trend. We do not take all Fractals, only the ones with tails pointing to the Fractal. Let me explain this in a bit more detail and as simple as possible with some examples. (I will also be posting a video tutorial with this to help understand this method. Long (Buy) Positions Using The Fractal Guru Strategy On the ADX, the dotted green should be above dotted red and the solid blue line should be steadily rising Look for a Candlestick with a tail pointing to a Down Arrow Fractal When you see this Down Arrow Fractal, enter Long. Place stops 5 pips below the low of the Fractal Candle. Exit using proper money management or upon the cross of the dotted green and red lines in the ADX. Short (Sell) Positions Using The Fractal Guru Strategy On the ADX, the dotted red line should be above dotted green line and the solid blue line should be steadily rising Look for a Candlestick with a tail pointing to a Up Arrow Fractal When you see this Up Arrow Fractal, enter Short. Place stops 5 pips above the high of the Fractal Candle. Exit using proper money management or upon the cross of the dotted green and red lines in the ADX.
Very Simple system - simply look for 1 of 2 candle formations at or near the bollinger band (in this case the default 20) You are looking for either 3 consecutive bulish candles for a buy, 3 consecutive bearish candles for a sell - that's it!!! - 3 white soldiers / 3 black crows formations Things to note. On the larger moves, the price WILL retrace. Best thing to do in this situation is when you see this happen (typically 1 or 2 candles in the opposing direction) simply close the trade and re-enter when the price has returned to the point where the change started. as for exit strategy - a lot of the time you can count on approx 2 - 3 times the value of the retracement (e.g. if the price retraces 10 pips, then you are looking on the re-entered trade of a TP between 20 - 30 pips! You can use ANY 3 consecutive candles, however this works best when the price has just "bounced" off the Bollinger Bands.
Picking tops and bottoms on Bollinger Bands By using multiple time frames and candle stick formation we will uncover how to pick tops and bottoms while trading in the trend of the bigger time frame. We begin by looking at the daily chart to ascertain what direction we looking to trade by using the common Bollinger Band indicators middle line. A pair trading above the 20SMA is in short term up trend. A pair trading below the 20SMA is in a short term down trend. Once we find our direction we move to the smaller time, 4hour and 1hour, there we look for weakness in a uptrend (touch of bottom bands) and strength in a down trend (top of bands).
As we move forward we discover a strategy that fits only chosen currency pairs.Take a look at the next Forex trading system: Currency pair: EUR/USD.Time frame: 30 min.Indicators: MACD (12, 26, 9), Parabolic SAR default settings (0.02, 0.2) Entry rules: When Parabolic SAR gives buy signal and MACD lines crossed upwards – buy. When Parabolic SAR gives sell signal and MACD lines crossed downwards – sell.Exit rules: exit at the next MACD lines crossover or if the market starts trading sideways for some time. Happy Forex trading!
The two indicators we are going to talk about here are found to be very well working when used side by side. This Forex trading system is an another simple discovery; and hundreds of such discoveries can be made when traders are there to learn and experiment. Any currency pair and time frame can be used.Indicators: Parabolic SAR default settings (0.02, 0.2), ADX 50 (with +DI, -DI lines) Entry rules: SELL When the +DI line is below the -DI line, and Parabolic SAR gives sell signal. When the +DI line is above the -DI line, all Parabolic sell signals must be ignored. Entry rules: BUY when the +DI line is above the -DI line, and Parabolic SAR gives buy signal. When the +DI line is below the -DI line, all Parabolic buy signals must be ignored. Exit rules: when +DI line and -DI lines have crossed again. Advantages: allows filtering entries and predicting good exits. Disadvantages: Both Parabolic SAR and ADX are follow-up indicators. Although they complement each other very effectively, the “weakest” in chain is ADX, because during trading it can give one signal, but later change to the opposite. Once given a signal from ADX, waiting for the current price bar to close to avoid such misleading is advised.
Current Forex trading system represents a well thought and very simple combination of indicators. Knowing what signal to look for with each indicator, provides a strong tip for good entries and exits. Time frame: Any.Currency: Any.Indicators: 5 EMA, 10 EMA, Stochastic (14, 3, 3), RSI (14, 70, 30) EA: SimpleBalanced_1_0.mq4 (Attached) Entry rules: Buy when 5 EMA crosses above 10 EMA and Stochastic lines are heading north (up) and Stochastic is not in overbought position (above 80.00 level) and RSI is above 50. Entry rules: Sell when 5 EMA crosses below 10 EMA and Stochastic lines are heading south (down) and Stochastic is not in oversold position (below 20.00 level), and RSI is below 50.Exit rules: when 5 EMA and 10 EMA cross in the opposite direction or if RSI crosses the 50 mark again. Advantages: allows filtering entries and thus is more accurate.Disadvantages: 5 and 10 EMAs can give very early exit signals.
Idea: to benefit on interest with positive rollover pairs, such as GBP/JPY, USD/CHF and others. Strategy requires having 2 accounts with different brokers - one with each broker. The first broker should pay interest for carrying the trade, while the second should not charge or pay any interest for carrying trades.I don't know if such type of brokers who don't charge/pay rollover interest exist today. If anyone knows, please advise. the rules are simple: open Long position, for GBP/JPY, for example with a broker who pays interest, and immediately open Sell position with a broker who doesn't charge interest. Buy and Sell positions cancel each other.Hold positions for as long as you like (for month or years) while earning interest everyday on rollover with the first broker. Additionally monitor the account which is on the losing side to make sure there are enough funds to sustain losses, otherwise add funds. The list of positive interest pairs (changes over the time as governments cut or increase rates; also various Forex brokers have their own rollover policies, where they may not pay positive interest on certain pairs. Check with your broker). Positive interest is paid when Buying:USD/JPYEUR/JPYGBP/JPYGBP/CHFAUD/JPYNZD/JPYNZD/USDUSD/CHFUSD/INRUSD/CNY Positive interest is paid when Selling:EUR/GBPEUR/AUDEUR/TRYUSD/TRYUSD/XAGUSD/ZAREUR/HUF So, again, my problem is, I don't know where to look for such brokers that don't apply rollover charges. Good luck!
Many traders love the allure of the volatility of the forex markets and prefer to trade intraday by opening and terminating positions within the hours of each other. Trading the daily charts is not very common because many traders lack the necessary patience to follow a trade for weeks on end to its logical conclusion. There are many things that a trader will gain by trading off the daily charts. In the first instance, we must be very familiar with the saying that the trend is our friend until it ends. The only way to determine the true trend for a currency is to look at the daily chart. A typical daily chart snapshot will show the price action for weeks at a time. You can then tell just by looking at the chart to see whether the trend is up, down or ranging. The chart above is the daily chart for the USDJPY. It is very clear from inspection that the currency pair is in a very strong uptrend after a long period of consolidation that lasted close to a year. Using short term charts will not give the true picture. Trading off the daily chart will reduce the frequency of trades, but will also allow the trader more time to assess a trade setup and trade it with greater certainty. Trade targets are larger, and a trader can make money from a few trades that will far outstrip what he will make by chasing pips all over the place. One trade I love to take off the daily chart is the retracement trade. Pullbacks are a normal part of trading because there will always be early bird traders who got into positions very early in the trend and will be looking to take some profits off the table. When they offload their positions, the price action of the currency will retrace. Now I am usually interested in the continuation of the moves in the direction of the trend. For me to do this, I need to know where the retracement will come to an end. With 5 points to choose from the Fibonacci retracement tool, I need to get a clear idea of where to make my entry. The tool I have found most useful is the Stochastics oscillator. When it crosses at overbought or oversold levels, it gives me a clear indication of exactly where to make my entries. From this daily chart above, the Stochastics crossed at oversold levels of 24.1 at the 50% Fibonacci retracement line. An entry here would have produced 250 pips as at the time of writing this on March 20th 2012. This is a simple strategy that works all the time. Trade the retracements off the daily chart.
I have spent a considerable time studying your strategies and i would like to share with everyone what i have taken and now apply to my trading. Any currency pair can be traded Indicators: 5,10,20 EMAs - RSI - MACD Time frame: I use 15min charts (I find bigger time frames to slow and bigger stops) Entry rules: On an down trend wait for a higher low.Find a 1-2-3 setupEnter long just below 2 with stops just under 3RSI MUST be above 50MACD must be or just about to cross over. Exit rules: Once you have reached to same distance as risked close out.