Pyramiding trading systems for forex are always in great demand. This one, uses multitude of tools to achieve great entry accuracy. CCI, SAR and EMA tandem are used to find the right market direction. Specific candle, defined by size and trend direction wick are used for entry signal.
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Strategy is quite complex, what makes it harder to trade manually. However, results are worth it. It can b e also used for scalping. Liquidation of positions is based on trailing stop provided by SAR indicator. Expert advisor also includes function to close all positions either in profit or loss.
System was tested for profitability on high quality tick data since 2003. Expert advisor able to trade it, was used in testing and it is available for those of you interesting in this forex strategy. We have tested it only for a small fraction of adjustable inputs. There are thousands of ways to use this strategy more effectively.
Used tools and indicators
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Exponential moving averages (EMA 500,250) Standard tool for trend identification. To establish trend, we will be looking for position of fast ema compared to slow.
Commodity channel index (CCI 100) Secondary trend filter. Adjust sell below (0) and buy above zone (0), to separate the market range and trend. The space between buy above and sell below zone is a no trade zone.
Trailing stop (extra deviation 80 pips). Primary way of position liquidation. Extra deviation can be applied to cover extra market volatility and let the position roll a little bit further.
Candle signal (Min 30, max 150 pips candle size) Candle must meet the requirements for minimum maximum body size. This will filter out hesitant, narrow candles leading nowhere. Tall candles tend to provide more momentum after entry, covering the distance of trailing stop.
Max wick size (15 pips) We define maximum wick size on signal candle. Tall wick signalizes too much struggle between bulls and bears, lowering momentum and making the candle unsuitable for this type of entry.
Volumes. Signal candle must have more activity than previous candle (larger volumes). This signalizes growing interest of traders in trend continuation (comparing the effect/result of bearish candle and larger volume).
MAX open trades (30): Limits the number of maximum open trades per direction.
Adding to the winner rule: If trade exists new trade can only be opened if account profit is larger or equal than number of open trades*lot size*100.
Liquidation: We can also adjust profit and loss targets for expert advisor. Do not forget to put – (minus) before max loss input. When using this function in expert advisor, use this system on only one currency pair per account. We haven't used this function in our test (it was set unrealistically high).
Forex strategy rules
SELL
EMA fast trending below EMA slow.
CCI trending below sell below zone.
Price closing below the SAR dot.
Bearish candle with defined min/max body size. Bottom wick does not surpass maximum allowed wick size.
Volume on signal candle is larger than on previous candle. Adding to the winner rules are met.
If all those conditions are met, we enter trade short on candle close.
Trailing stop is placed at last closed SAR dot + extra deviation for TS above is applied.
BUY
EMA fast trending above EMA slow.
CCI trending above buy above zone.
Price closing above the SAR dot.
Bullish candle with defined min/max body size. Upper wick does not surpass maximum allowed wick size.
Volume on signal candle is larger than on previous candle. Adding to the winner rules are met.
If all those conditions are met, we enter the trade long on candle close.
Trailing stop is placed at last closed SAR dot - extra deviation for TS below is applied.
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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.
