Trail with envelopes forex strategy

This forex strategy expects the signal on typical wave structure of the price in forex market. For trend to continue to evolve, higher highs/ lower low are necessary. Once the trend fails to produce new extremes, is as good as done. System utilizes trailing stop based on envelopes line.

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With this trading system, we will be placing pending buy stop/ sell stop at newly created extreme levels. They will be there waiting for trend to continue. Trend failing to create new high/low will leave our last order untriggered and will help us avoid entering the trade at the end of a trend.

 

Forex strategy was tested for profitability on high quality historical data since 2003. There is a lot of experience available with this type of positioning, confirming the profitability of this forex strategy.

 

Used tools and indicators

Exponential moving averages (EMA 250,550) Simple trend filter increasing the accuracy of entry by avoiding counter trend fake outs.

 

Envelopes (period, 60, deviation 0,3). Simple price tunnel. Price trending outside of the tunnel is considered to be moving fast enough (enough momentum) for us to place entry on fractal high/low. Envelopes line that got broken will lead our trailing stop after the entry

 

Advanced trailing stop (extra deviation applied 80 pips) Based on envelopes line. Extra distance applied to cover the volatility.

 

Stay valid: Not triggered order will remain valid for 2 days.

 

Fractals. Fractals are marking local extremes in the price development. Pending orders will be placed on price marked by those extremes.

 

Forex strategy rules

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SELL

EMA fast trending below EMA slow. We will be looking on for pending sell stop entry.

Price trending below bottom envelopes line.

 

Bottom fractal close, marking the local high below the envelopes line. Place pending sell stop order at low marked by bottom fractal.

 

Pending order will expire in 2 days if left untriggered.

Once you enter the trade, place trailing stop at bottom envelopes line. TS is adjusted on every candle close only in the direction of profitable trade. Extra deviation applied.

Take profit: not applied in test

 

BUY

EMA fast trending above EMA slow. We will be looking on for pending buy stop entry.

Price trending above upper envelopes line.

 

Upper fractal close, marking the local low above the envelopes line. Place pending buy stop order at high marked by upper fractal.

 

Pending order will expire in 2 days if left untriggered.

Once you enter the trade, place trailing stop at upper envelopes line. TS is adjusted on every candle close only in the direction of profitable trade. Extra deviation applied.

Take profit: not applied in test

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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.

 

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