Profitable forex strategy, tested on over 13 years of historical data. Strategy uses simple momentum and breakout signal, together with powerful position liquidation model. Leverage on winning trades is increased while losing trades are moved aside.
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Adding to the winner (pyramiding principle) is used with the intention of liquidating the winners as soon as possible. If trade reverses strategy liquidates all position in overall loss promptly. Envelopes are used to draw a tunnel. Breakout of one of the boundaries is confirmed by a candle of specified size closing in the direction of breakout.
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Theforexkings brings you this forex strategy together with free expert advisor trading it. Test many different variations of this forex strategy to apply it across all currency pairs and time frames. This strategy was tested on profitability on historical data since 2003, to replicate the results in screenshots use following settings.
Forex strategy tools and indicators
Envelopes (dev 0,4, period 60) Moving averages applied on high/low price are widely used to draw a tunnel. This forex strategy draws a tunnel with intention of looking for a breakout. Price closing either above or below the tunnel is our primary signal that is confirmed by candle,
Candle signal (Candle of defined minimum 15 pips and maximum size 150 pips) closing in the direction of breakout. Once it closes trade is opened.
Equity based stop and take profits: There are no firmly set profit and loss targets. Instead strategy liquidates positions in overall account profit 20 USD/EUR and loss of 4 USD/EUR. For strategy to work properly not other trades should be opened in the account (this applies on free EA). Also, lot size should be put into perspective with profit targets and loss (in account currency).
New trades are opened only when existing trades reached the profit that equals: number of opened trades*1 (risk limiting factor-1 unit of account base currency)
Adjusting the risk limiting factor: 1(value)* each 0,01 of lot size used.
Forex strategy rules
SELL
Price closes below bottom envelopes line.
Bearish candle of minimum size 15 pips closes. We enter the trade short on its close.
If position exists next trade can be only added if the account profit equals number of trades*risk limiting factor.
Risk limiting factor (RLF) is dependent on used lot size. RLF value is 1 per each 0,01 lot size used.
Close all position in overall loss: 4 USD/EUR
Close all positions in overall profit: 20 USD/EUR
BUY
Price closes above upper envelopes line.
Bullish candle of minimum size 15 pips closes. We enter the trade long on its close.
If position exists, next trade can be only added if the account profit equals: number of trades*risk limiting factor.
Risk limiting factor (RLF) is dependent on used lot size. RLF value is 1 per each 0,01 lot size of used.
Close all position in overall loss: 4 USD/EUR
Close all positions in overall profit: 20 USD/EUR
Notes: when increasing the lot size in EA do not forget to increase target profit/loss automatically together with risk limiting factor. Low draw down of this forex strategy allows the use of higher leverage according to our tests.
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Disclaimer: Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.
