This trading system uses DeMarker with very high calculation period to identify trend and to avoid trading in the range. Then we use stochastic indicator, considering both K and D calculation line. Aim of this strategy is to time the trend following entry just at the end of a correction
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Every position is entered with mandatory protection measures . Predefined stop loss is placed just as we enter the trade. Strategy was tested on historical data since 2003, with positive results. Expert advisor able to trade it and suitable for testing is provided freely by theforexkings.com.
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Used tools and indicators
Following settings were used to achieve the results captured in screenshots ! (EURUSD 1H since 2003).
DeMarker oscillator (DEM 50). Apply two additional values in the indicators window (buy above, sell below zones 0,5). Price moving between those two lines signalizes insufficient momentum for entering the trade. Trading will be avoided. Trend is confirmed by price moving either above or below of its respective zones.
Stochastic (D 6, K 20, slowing 5). Trade signal. Stochastic will help us find relatively low price in uptrend ang high price in downtrend. It does so by timing the correction end. We try to enter the position once the price starts to move back in the direction of trend after correction exhaustion. This is achieved by using both Stochastic signal lines together with 4 candle formation signal.
4 Candle formation signal. Correction is exhausted once we see a trend continuation candle, with body taller than any of previous 3 candles. We will enter the trade once our signal candle closes.
Forex strategy rules
SELL
DEM trending below 0,5 line signalizing downtrend momentum. Only short trades can be entered.
Signal:
Primary: Main stochastic line moving above 70 value. While still above 70, signal line falls below the main line.
Secondary:
Signal candle body is larger than body of any of previous 3 candles. We enter the trade on signal candle close. Placing stop loss and take profit immediately upon entry.
Stop loss: 60 pips
Take profit: 30 pips
BUY
DEM trending below 0,5 line signalizing downtrend momentum. Only long trades can be entered.
Signal:
Primary: Main stochastic line moving above 70 value. While still above 70, signal line falls below the main line.
Secendary:
Signal candle body is larger than body of any of previous 3 candles. We enter the trade on signal candle close. Placing stop loss and take profit immediately upon entry.
Stop loss: 60 pips
Take profit: 30 pips
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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.
