This forex strategy is all about closing methodology. Fractal wave geometry is used, as an effective method of placing and adjusting the stop loss. It also covers the function of take profit. Thorough testing confirmed that this system works very well on 1H chart. Due to the scalable nature of fractal indicator, it is certain that system works just as well on other instruments and timeframes.
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This feature of the strategy can be used to scale the aggressiveness up or down, according to traders needs and goals. The liquidation method can be applied on different entry methods and improve the results of most of the trend following forex strategies.
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System uses combination of RSI oscillators together with signal candle. The entry method is fully momentum focused.
System was tested on high quality historical data of EURUSD since 2013. Results can be seen on screenshots. This forex strategy is also provided with free expert advisor. Enjoy.
Used tools and indicators
Relative strength index (RSI 50) primary filer. Separate range from the trend. Identify uptrend / downtrend. To do so, we apply additional zone in the middle of indicators window.
Relative strength index (RSI 14) entry signal. Used as a standard momentum signal. Entry is confirmed by candle closing in the direction of trend and momentum with predefined body size.
Big candle signal (10 to 150 pips). Immediate momentum confirmation. Define the size of candle body to filter out the hesitant session or too aggressive unpredictable moves.
Fractal trailing stop. TS based on last closed fractal. Additional distance 100 pips can, and will be applied to cover the high volatility of forex market.
Forex strategy rules
RSI filter trending below sell below zone (45). This confirms the downtrend and downward momentum.
RSI signal falls below 30 line, coupled with bearish candle with body size (10 to 150 pips).
We enter the trade short on signal candle close.
TS is placed on next upper fractal close (+ additional distance of 100 pips). It will be adjusted with each closed upper fractal, only in downward direction (additional distance will still be applicable).
RSI filter trending above buy above zone (55). This confirms the uptrend and upward momentum.
RSI signal rises above 70 line, coupled with bullish candle with body size (10 to 150 pips)..
We enter the trade long on signal candle close.
TS is placed on next bottom fractal close (- additional distance of 100 pips). It will be adjusted with each closed bottom fractal, only in upward direction (additional distance will still be applicable).
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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.