Strategy that is fundamentally simple, yet effective. It uses CCI indicator both as trend filter and entry signal. SAR indicator is added to the mix with three important tasks: Filter out counter trend conditions. Confirm entry. Provide the price increments for trailing stop loss placement. Strategy was thoroughly tested on high quality tick data since 2003, with positive results.
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Strategy uses relatively conservative approach to risk. It never opens more than one trade at the same time. All positions are protected by trailing stop placed immediately upon entry. TS also ensures, that we let our profits roll. We will no limit the upside of any trade.
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Used tools and indicators
Commodity channel index (trend filter period 100). Additional lines sell below/buy above are applied in the indicators window. Those will separate uptrend from downtrend and create a range in the middle. This will be our no trade zone as indicator marks the price that is mostly ranging. This is a trend following strategy, so we will avoid those conditions.
Commodity channel index (signal period 5). Indicator reaching overbought / oversold zone will trigger the entry. We wait for candle close to enter the position. Also, trade direction must be confirmed by parabolic SAR.
Parabolic SAR. Price closing below SAR dot confirms the short position entry. Price closing above SAR dot confirms long position. SAR will be also used for trailing stop placement and adjustment. Modify indicators step and max to apply it in other currency pair and time frames.
Forex strategy rules
CCI trend filter trending below SELL below zone. Downtrend is therefore confirmed and we will be looking only for short signals.
CCI signal rising above 100 line.
Price closing below the SAR dot.
We enter the trade short on candle close, placing trailing stop at last closed SAR dot + extra distance of pips. Trailing stop is the only method of position closing.
CCI trend filter trending above buy above zone. Uptrend is therefore confirmed and we will be looking only for long signals.
CCI signal falling below -100 line.
Price closing above the SAR dot.
We enter the trade long on candle close, placing trailing stop at last closed SAR dot - extra distance of pips. Trailing stop is the only method of position closing.
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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.