by TFK1: This is very risky strategy, but sometimes that's what a man has to do when he does not like to lose. And I certainly don't. Traders who are enjoying safe money managements strategies and are happy to have one trade opened at the time should stop reading right now, because this forex strategy might heighten your blood pressure.
Even if you decide to read further, make sure that you consider all the risk factors and actually think about what will this strategy require from you to be profitable.
This is an aggressive, no stop loss strategy that use multiple position entry together with no stop loss approach. Instead, losing trade are overcompensated by continue to trading in the new market direction. Once you have a losing trade opened you will need to trade in the opposite side of the market, while yo wait for price to return to your initial trade.
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.
Used forex indicators
EMA (exponential moving average) period 21. Apply additional lines with following values: 200,-200,450,-450,700,-700. You will buy and sell at those price levels. I prefer the darker colors to the setup (therefore dark rainbow) but the strategy is not made or broken by color of indicators. Therefore, colors main remain for you to be chosen.
MACD (moving average convergence divergence) 21,60.9 histogram of the MACD will help us to identify the trend without adding clutter to the already full price chart.
Forex strategy rules
BUY:
MACD trending above zero line, we will enter long trades only. First buy trade is entered at main EMA line. If it moves to loss, second trade is opened at -200 line. If the second trade moves to loss, Third is opened at -450 line. If this one moves to loss, Fourth is entered at -700 line. Once we enter the fourth trade, averaging is over, waiting has begun.
We trade to liquidate the position at profit ASAP. Some positions might be at loss but that's OK, if the overall profit for position is positive.
The more positions you have opened the less profit you should go after. Once you have four opened positions, liquidate all of them as soon as the open profit moves to green numbers.
You wait without trading for as long as MACD remains above zero. Once MACD momentum shift below zero, you are will start to enter the short trades at the opposite spectrum of EMA rainbow.
SELL
MACD trending below zero line, we will enter short trades only. First short trade is entered at main EMA line. If it moves to loss, second trade is opened at 200 line. If the second trade moves to loss, Third is opened at 450 line. If this one moves to loss, Fourth is entered at 700 line. Once we enter the fourth trade, averaging is over, waiting has begun.
We trade to liquidate the position at profit ASAP.
The more positions you have opened the less profit you should go after. Once you have four opened positions, liquidate all of them as soon as the open profit moves to green numbers.
You wait without trading for as long as MACD remains below zero. Once MACD momentum shift above zero, you are will start to enter the long trades at the opposite spectrum of EMA rainbow.
Final rules: There can be only opened one trading series in one market direction at the time. If you have four long trades in loss, you are only allowed to open short positions according to rules.
