The Wave forex strategy

Price moves in waves (swings) up or down. In trend, wave in its direction tends to be longer. Struggle between bulls and bears for price dominance is represented by pull back formation. When one group of traders moves the price substantially in one direction (inital wave), the other group will consider this to be a good price for them to try and push the price back. This will create typical pullback formations in wave structure of the price.

 

By comparing initial swing (wave) to the pullback formation, we can often times estimate strength of the trend and commitment of trading group opposing it. Small pullback formation (when compared to initial wave) often times mark great entry to follow the trend.

 

Signal is confirmed once the initial wave reaches new high/low after the pullback formation (correction).

 

For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

 

This forex strategy uses zigzag forex indicator together with bollinger bands for maximum accuracy and to be able to enter only the signal waves with massive momentum that is necessary to break outside of bollinger bands boundaries.

 

Used forex indicators.

ZigZag forex indicator (8,5,3). ZigZag will mark the initial (signal wave 1.). It will be followed by correction wave. Correction wave will serve as a signal confirmation and guide for stop a profit targets placement

Bollinger bands (20). Boolinger bands can adapt to market volatility. Therefore, breakout of one of boundaries signalizes sufficient momentum of swing that should be followed by price continuation. This will be confirmed by correction wave.

 

Forex strategy rules

BUY:

 

 

Bullish Zigzag line (1.) closing above upper bollinger band (A).

Correction wave (2.) not closing lower than 50 percent of signal line (1.). Correction wave closing further below, may signalize possible trend reversal and should be avoided.

Pending buy order is placed once the wave (3.) opens. Buy order is placed at the high (A) reached by signal wave (1.)

Stop loss is placed at the low reached in correction wave (B).

Take profit: Equals the distance between (A) and (B).

 

SELL:

Bearish Zigzag line (1.) closing below bottom bollinger band (A).

Correction wave (2.) not closing higher than 50 percent of signal line (1.). Correction wave closing further above, may signalize possible trend reversal and should be avoided.

Pending sell order is placed once the wave (3.) opens. Buy order is placed at the low (A) reached by signal wave (1.)

Stop loss is placed at the high reached in correction wave (B).

Take profit: Equals the distance between (A) and (B).

Please reload

ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com