Forex strategy utilizing CCI as momentum signal. Profits are maximized thanks to advanced trailing stop that is based on SAR indicator. This method works very well in this system. Profits are protected and possible loss minimized. System was tested on historical data since 2003, with profitable low drawdown results.
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Used tools and indicators
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Alligator forex indicator. (600,400,250) Great tool for trend identification. We will use higher calculation period to identify trend. All trades must be take in this direction.
Commodity channel index (CCI 14) This indicator will be our primary signal. Modify its period to increase or decrease its sensitivity to rapid price movement.
Big candle (40 - 150 pips body). Candle with predefined body size, closing in the direction of main trend. This is immediate trend and momentum confirmation on least possible timeframe.
Parabolic SAR (max 0,3, step 0,005) Trailing stop loss is placed according to SAR dot position. Additional distance helps to cover the market volatility and follow the trend without being stopped out too early.
Forex strategy rules
SELL
All alligator lines are aligned according to downtrend. Slowest at the top. Fastest at the bottom. We will look for short trades only.
Signal: CCI falling below – 100 line. This action is coupled with close of bearish candle (range 40 – 150 pips).
We place trailing stop at the last closed SAR dot + additional distance of 80 pips. Trailstop can only be adjusted downwards.
The expert includes a take profit function that was not included in our tests.
BUY
All alligator lines are aligned according to uptrend. Slowest at the bottom. Fastest at the top. We will look for long trades only.
Signal: CCI rising above 100 line. This action is coupled with close of bullish candle (range 40 – 150 pips).
We place trailing stop at the last closed SAR dot - additional distance of 80 pips. Trailstop can only be adjusted upwards.
The expert includes a take profit function that was not included in our tests.
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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.
