Forex strategy combining MACD forex indicator together with skill of trendline drawing simplified to its core. To focus on the price, price chart is stripped to mere line graph. After we find our entry signal conservative approach will help us find exits.
Used forex indicators
MACD (moving average convergence divergence) 26,52,9
Trendline drawing (basic)
Forex strategy rules
Timeframe above 15 min. Any currency pair.
BUY:
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MACD is trending above zero (histogram closes above central line). We will consider this to be a valid uptrend. MACD change before signal completion renders it invalid.
We will be looking for at least three consecutive tops (local highs) in line chart that can be connected by single, downwards sloping trendline. Each top is lower than previous one.
This action will create downwards sloping resistance. Once we draw the line, we switch to candle graph, to be more accurate with entry, take profit and stop loss.
Breakout candle closing above resistance will serve as an entry signal, Candle must close clearly above resistance. Even if we visualize it as a line, it is more of a zone.
Stop loss is placed below the last signal low within formation (low reached before breakout)
Take profit equals the distance between the highest and lowest point of our signal formation (three connected tops). As with all chart formation, TP needs to be adjusted according to market conditions – this require experience that can be only acquired through trading.
SELL:
MACD is trending below zero (histogram closes below central line). We will consider this to be a valid downtrend. MACD change before signal completion renders it invalid.
We will be looking for at least three consecutive bottoms (local lows) in line chart, that can be connected by single, upwards sloping trendline. Each low is higher than previous one.
This action will create upwards sloping support. Once we draw the line, we switch to candle graph, to be more accurate with entry, take profit and stop loss.
Breakout candle closing below support will serve as an entry signal, Candle must close clearly below support. Even thogh we visualise it as a line, it is more of a zone.
Stop loss is placed above the last signal high within formation (high reached before breakout)
Take profit equals the distance between the highest and lowest point of our signal formation (three connected bottoms). As with all chart formation, TP needs to be adjusted according to market conditions – this require experience that can be only acquired through trading.
