Reliable and simple forex strategy, based on alligator and envelopes forex indicator. Alligator is the indicator used to identify current market trend. Envelopes will confirm the entry once the price breaks above/ below the tunnel. This momentum signal is quite accurate, especially when it comes to avoiding market reversals. Price will simply not return within the tunnel to reset it for another entry. This leaves alligator indicator enough time to catch up to new market conditions.
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Trading system was tested for profitability on historical data since 2003 (1H EURUSD tick), and it is provided with expert advisor by theforexkings.
Used tools and indicators
Alligator (600,400,250) Trend identification. All lines must be aligned according to downtrend/ uptrend. We follow the trend with each entry.
Envelopes (period 80, deviation 0,2). Momentum signal. Price closing outside of the tunnel boundaries
Big candle signal(40 – 150 pips). Final momentum confirmation. Strong bullish or bearish candle confirming immediate momentum
Universal trailing stop (extra deviation 20 pips). Each entry is followed by trailing stop adjusted with each candle close and placed according to candle high (sell) or low (buy).
Forex strategy rules
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SELL
All alligator lines aligned from slowest at the top to the fastest at the bottom. They main untangled and clearly separated, confirming downtrend.
We will be looking for price to close below the envelopes tunnel, while previous close was within the tunnel.
We enter the trade short on bearish candle close (predefined size) below the bottom envelopes line. Trailing stop is placed at the signal candle high + extra deviation above.
We close the trade only on TS hit.
BUY
All alligator lines aligned from slowest at the bottom to the fastest at the top. They remain untangled and clearly separated, confirming uptrend.
We will be looking for price to close above the envelopes tunnel, while previous close was within the tunnel.
We enter the trade long on bullish candle close (predefined size) above the upper envelopes line. Trailing stop is placed at the signal candle low - extra deviation above.
We close the trade only on TS hit.
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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.
