When you decide to add to your winning position, the key deciding factor should be trend and price momentum. Does it seem like the price is continuing to move in your direction ? Is it accelerating or already reversing in lower time frames ? This forex strategy uses adding to the winner principle to get aggressive on winning trades.
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To do so effectively, trend is identified using 6 exponential moving averages working in 3 pairs. Once we know the trend direction, and it is confirmed by all of our EMAs we will enter the trade on simple candle signal consisting of two signal candles and volume reading.
Forex strategy was tested for profitability (tick 1H since 2003) and it comes with free expert advisor (by theforexkings).
Used tools and indicators
Exponential moving averages (EMA: 500,250, EMA 2: 200,100, EMA 3: 100,50). All EMA pairs aligned either according to downtrend or uptrend – trend is confirmed. Entry allowed.
Signal: Two consecutive bearish/bullish candles with growing volumes. We can define minimum/maximum body size of each candle (first signal candle min 10 /max 150 pips, signal candle min 20/max 150 pips).
Adding to the winner: If trade exists new trade can only be opened if account is in profit (account profit greater than lotsize*100*number of open trades)
Trailing stop (extra deviation 90 pips): Each position is protected by trailing stop following the winning trade after each candle close. Extra deviation is applied to cover for market volatility.
MAX open trades: 10 in test. Adjust it according to desired aggression of the system. The system works just as fine for 1 trade per side allowed.
Forex strategy rules
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SELL
In all EMA pairs, fast EMA trending below slow EMA. Downtrend fully verified. We will go for short trades.
Signal: Two bearish candles. Volume on second candle is larger than on first signal candle. Both candle fit into min/max body range.
We enter the trade short on second signal candle close. Trailing stop is placed at the high of last closed candle + extra deviation for trail stop above.
All trades are closed with TS only.
If trade exists new trade can be opened only according to add to the winner rules (account profit).
BUY
In all EMA pairs, fast EMA trending above slow EMA. Uptrend fully verified. We will go for long trades.
Signal: Two bullish candles. Volume on second candle is larger than on first signal candle. Both candle fit into min/max body range.
We enter the trade long on second signal candle close. Trailing stop is placed at the low of last closed candle - extra deviation for trail stop above.
All trades are closed with TS only.
If trade exists new trade can be opened only according to add to the winner rules (account profit).
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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.
