When it comes to aggressive trading, pyramiding is one of the best options. And when it comes to managing the opened positions in the pyramid. SAR indicator is one of the best options as well. This results in historically profitable forex strategy utilizing adding to the winner (pyramiding principle) to increase the leverage on winning side of the market.
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Alligator indicator is also used as a trend identification tool. The entry is triggered by simple candle signal. This enables us to enter the trend aggressively since the first SAR dot. SAR will both confirm the entry and provide a pathway for trailing stop loss placement.
Strategy was tested on historical data of EURUSD since 2003 with positive results. Results of the test can be seen on screen shots. EA is provided free for our readers by theforexkings.com.
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Used tools and indicators
Alligator (650,400,50). Primary trend identification tool. Helps to identify trend on different levels. All trades are entered only in the direction of this trend. This increase position accuracy by few crucial percents.
SAR parabolic (step 0,03, max 0,3). A primary tool of execution in this forex strategy. To enter the trade we consider the position of SAR relative to current price (open, close respectively). After the entry, trailing stop is placed and adjusted on SAR basis with additional distance of 80 pips applied.
Add win. If trade exists new trade can only be opened on price covered by parabolic SAR trail stop of previous position. Also, floating profit must be larger than number of opened trades*10 pips (EURUSD value).
Candle entry: Entry is done on candle closing in the direction of Alligator and SAR identified trend. We can define the signal candle size to filter out the insufficient momentum signal.
MAX open trades (10). This setting modifies the aggression of strategy. Exposure and risk.
Forex strategy rules
SELL
All alligator lines aligned according to downtrend form the slowest at the top to fastest at the bottom.
SAR dot closing above the price candle. We will enter short trades only.
We wait for close of bearish candle with size range 10 – 150 pips. SAR must close above the candle.
Once it closes we enter the trade short placing trailing stop + 80 pips above the SAR dot.
If trade exists new trade can only be opened if floating account profit is number of opened position*10 pips(EURUSD value). It must meet same requirements as initial position.
BUY
All alligator lines aligned according to uptrend form the slowest at the bottom to fastest at the top.
SAR dot closing below the price candle. We will enter long trades only.
We wait for close of bullish candle with size range 10 – 150 pips. SAR must close below the candle.
Once it closes we enter the trade long placing trailing stop – 80 pips above the SAR dot.
If trade exists new trade can only be opened if floating account profit is number of opened position*10 pips(EURUSD value). It must meet same requirements as initial position.
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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.
