This is more advanced forex trading system. It is utilizing a handful of tools in on goal. Reaching profit without too much of drawdown. All the tests are suggesting that strategy can manage to succeed in this high priority task.
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The system doubles up on trend identification, using both EMA combination and CCI momentum. CCI also helps to separate the ranging market which helps tremendously. To enter the trade envelopes signal is used together with standard price bounce formation. The key element to this forex strategy is that it considers market wave geometry by employing the fractals indicators to place and adjust a stop loss as a trailing stop.
Strategy was tested on high quality historical data since 2003 with positive results. At the forexkings, we bring you the strategy together with free expert advisor exploring it potential.
Forex strategy tools and indicators
Exponential moving averages (EMA 500 and 250 in test). Combination of moving averages is used in standard setup to identify general trend.
Commodity channel index (CCI 50). Oscillator with high calculation period helps to confirm the price momentum. The central zone is applied (sell below 0, buy above zone 0 in test). It helps to filter out market conditions with insufficient price momentum.
Envelopes (period 40, deviation 0,2). Envelopes are used as an entry signal. We will be trading on price briefly penetrating the envelopes tunnel and returning back to its center. The bounce.
Fractals based trailing stop. Fractals are used to gauge the market wave geometry. This is actually one of the best and most scalable approaches for placing and adjusting the stop loss. Extra distance can be applied to modify the TS sensitivity and adapt it to various market conditions (in test 40 pips). Works like a charm !
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Forex strategy rules
EMA fast trending below EMA slow. CCI trending below sell below zone. This is identified as downtrend with sufficient downwards momentum for us to be looking for a short entry signal.
Signal: Price penetrating upper Envelopes line only to close back within the tunnel with next candle. We enter on candle close. Trailing stop is placed above the price marked by last upwards pointing fractal. TS is the only way of how to close a trade in this forex strategy.
EMA fast trending above EMA slow. CCI trending above buy above zone. This is identified as uptrend with sufficient upwards momentum for us to be looking for a long entry signal.
Signal: Price penetrating bottom Envelopes line only to close back within the tunnel with next candle. We enter on candle close. Trailing stop is placed below the price marked by last downwards pointing fractal. TS is the only way of how to close a trade in this forex strategy.
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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.