To time the break of the price wave in forex, usually means to find almost an ideal entry. Such entry would require only minimal stop loss. Most of the time,wehn entring the postion precisely position will move into green number soon after the entry. This trading system attempts to accomplish just that.
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Historical data test EURUSD 1H, tick data since 2003. Expert available at the bottom of the article.
Trading system uses moving averages (exponential) to identify main trend. Full CCI signal together with SAR confirmation is used to time the break of the wave. Position are liquidated only by advanced trailing stop based on SAR dot close.
Used tools and indicators
Exponential moving averages (EMA 500,250) Trend identification is absolutely necessary. Easiest and still extremely accurate method is to use standard EMA positioning.
Commodity channel index (CCI 21) complete CCI signal is used to find a wave break. It must be accomplished by adequate Sar parabolic response
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SAR parabolic (max 0,2, step 0,005). Crucial component of this trading system. Confirms the entry and trails the stop loss.
Advanced SAR base trail stop (extra deviation 70 pips) It is adjusted with each SAR dot close only in the direction of profitable trade. Extra distance is applied to cover for unexpected moves and price spikes.
Forex strategy rules
EMA fast trending below EMA slow. Downtrend. Only short trades can be considered and we will be looking for CCI to rise above 100 line.
Once it closes back below it, together with SAR dot closing above the price, we enter the trade short on candle close.
Trailing stop is placed above the last closed SAR dot + extra TS deviation
EMA fast trending above EMA slow. Uptrend. Only long trades can be considered and we will be looking for CCI to fall below - 100 line.
Once it closes back above it, together with SAR dot closing below the price, we enter the trade long on candle close.
Trailing stop is placed below the last closed SAR dot - extra TS deviation
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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.