This strategy is based on wave geometry of the market.here it will be identified by fractals. Those will be used as a signal and also as a method of position liquidation due to the trailstop placement. Strategy showcase full spectrum of fractal use. Pending orders are placed at historical high low price, enabling us to enter the trade at historically interesting price.
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Moving averages are used to establish a trend and to make sure we stay on the right side of the wave. Strategy is fundamentally sound. Therefore it can be applied on any instrument and time frame. It was tested for profitability on 1H tick EURUSD data with great results. At theforexkings.com we reveal full strategy rules and we provide you its expert advisor suitable for testing.
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Used tools and indicators
Exponential moving averages (EMA 500,100) Standard use of moving averages. Relative position of moving averages (comparing slow and fast) will identify a trend. This simple setup works very well in most of the forex strategies. Alone, it can add couple of percent to our winning rate, thus providing so much needed edge in forex.
Fractals. Fractals are everything in this forex strategy. We make sure that wave is created in the direction of new trend. New high / low was created. If so, last fractal is used for pending order placement. It will mark historically high/low price suitable for entry. After the entry, we use fractals for trailing stop placement.
Trailing stop (100 pips extra distance). TS is placed at last fractal high for short orders and last fractal low for long orders. Additional distance can be applied to cover the market volatility. We want to make sure we do not get washed out of good trade just for being too conservative with our protective measures.
Stay valid (3) How long will placed pending order remain valid.
Forex strategy rules
EMA slow trending above EMA fast. Downtrend.
Once the second signal fractal closes (last fractal) we place pending sell order (sell limit) at price marked by it. The order will remain valid for days.
Once it triggers, we wait for new upper fractal to close. We place trailing stop at the price marked by it + extra 100 pips distance above it. We move trailing stop only in downward direction, with each new upper fractal. This will be the only method how we close the trade.
EMA slow trending below EMA fast. Uptrend.
Once the second signal fractal closes (last fractal) we place pending buy order (buy limit) at price marked by it. The order will remain valid for days.
Once it triggers, we wait for new bottom fractal to close. We place trailing stop at the price marked by it - extra 100 pips distance below it. We move trailing stop only in upward direction, with each new bottom fractal. This will be the only method how we close the trade.
Notes: Buy and sell trades can be opened simultaneously. Only one trade per side. Strategy is almost always in trade.
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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.