Momentum strategies are working exceptionally well, when combined with trailing stop and oscillators. This forex strategy used both of these tools to its advantage. We will be using two Demarker oscillators. One as a filter and second one as signal. Each trade will be protected by trailing stop. Strategy produced great results in historical data test since 2003.
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Used tools and indicators
Demarker trend filter (DEM 150). We apply additional lines in indicators window. Sell below zone (45) and buy above zone (55). Those two lines will separate downtrend from uptrend. The central zone will be uses as a no trade zone, as we consider this to be a market range.
Demarker signal (DEM 21). Demarker with faster calculation period will notify us on price moving rapidly in the direction of trend. Rapidly moving price provides good entry opportunity, especially when using trailing stop as we will do.
SAR parabolic (MAX 0,05, step 0,015): SAR is simple entry filter, it also leads the trailing stop and its widely considered to be one of the best method for trail stop placement.
Trailing stop (extra deviation 60 pips applied). TS is in initially placed on last closed SAR dot. However, most of the time it is necessary to apply extra distance for TS (between the dot and TS itself). This little trick improves the capacity of strategy to follow the trend and brings better results.
Signal candle. Upon the entry, we look for simple and relatively common candle signal. Candle must close either below the low or above the high of previous candle. It also must close in the direction of trend.
Forex strategy rules
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Demarker filter trending below sell below zone. Downtrend, look for short entry only.
Demarker signal closing below 0,3 line. Candle close is below the low of previous candle and below the SAR dot.
We enter the trade short.
Trailing stop is placed at last closed SAR dot + extra distance of 60 pips. TS is the only method of position liquidation.
Demarker filter trending above buy above zone. Uptrend, look for short entry only.
Demarker signal closing above 0,7 line. Candle close is above the high of previous candle and above the SAR dot.
We enter the trade long.
Trailing stop is placed at last closed SAR dot - extra distance of 60 pips. TS is the only method of position liquidation.
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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.