As a professional trader spending hours on hours per week looking at charts, you start to develop a technical vision which unconsciously lets you see cardinal points in the market, overlooked by the untrained eye. After working with it manually for several years and taking very nice profits from the market, I have started the phase where I am trying to automate my rules of trading as much as I can.
In addition, releasing this system goes hand in hand with my primary goal, which is to increase the level of trading for many traders out there. With the help of my trading tools, I have created for you well, Marina coded it so she deserves some credit , the Pips Carrier, which turns out to be a piece of cake even for beginners, allowing them to produce amazing results right from the start.
My belief is that even a trader who uses technical analysis must understand the basics of the indicator he uses in his day to day trading. It is a very important indicator. This indicator has been developed by Gerald Appel , who is considered a classic technical analysis guru. The histogram the vertical bars you see below the lines represents the difference between the two averages.
Zero level is the most important level of this histogram. This is a test level. When the histogram is above zero level , the currency is on an uptrend. When the histogram is below zero level , the currency is on a downtrend.
You notice that the histogram consists of several slopes. If a histogram is above zero level and its slope is facing down, this is a sign that the market is expected to decline. If a histogram is below zero level and its slope is facing up, it means that market is likely to go up.
For a long trade , we want the histogram to: This situation indicates that the market is on its way to a reliable uptrend, one that will allow us to join it. This situation indicates that the market is on its way to a reliable downtrend, one that will allow us to join it. Now, you are probably wondering: In order for us to answer this question we should turn to our next indicator — the Slow Stochastic. This indicator will help us with making a final confirmation of this trade and it will determine the exact point to enter it.
These two levels represent extreme zones. Level 80 reflects the overbought zone and level 20 represents the oversold zone. I assume that when the market reaches these levels, it is about to change its direction.
So, if the Stochastic reaches level 80, I would expect the market to turn down. If it touches level 20, I would expect it to go up. First we need to recognize a turning point on the MACD histogram.
This means that the blue histogram bars should be above the zero level, and then it should start declining. Finally it should reverse and go up again. We want at least one of the averages to be below level Now is the moment we should determine our exact entry point. The moment we see the histogram rise again and the stochastic decrease to the oversold zone, we need to wait for the candlestick that created this condition to close.
As soon as the candlestick is closed, we should enter this trade. In this example we can clearly see that the histogram is facing up again and that the Stochastic lines have crossed each other on the oversold level, on their way up.
The histogram is facing up and the stochastic lines have crossed each other on the oversold zone, level It refers to a situation where the histogram is above level 0 and declines below level 0. If it happens i. We place the stop loss 1 pip below our base candlestick, which is the candlestick where all the conditions have been met. First Take Profit Target My first take profit goal is to set a profit target of a 1: If I risk 50 pips, my take profit target will be 50 pips.
The second profit target is twice the stop loss. This means that the histogram should be below the zero level, and then it should start rising. Finally it should reverse and go down again. The moment we see the histogram fall again and the Stochastic reach the overbought area; we need to wait for the candlestick that created this condition to close.
We place the stop loss 1 pip above our base candlestick, which is the candlestick where all the conditions have been met. This strategy has proven to be very reliable and accurate.
It is also easy to use—the ultimate way to enjoy and take advantage of market trends. This strategy is okay, I have been using it for a long time and I have been training my clients how to use it. It makes good returns. You can use it with any time frame of your choice, the rules apply to any time frame. For those asking about the parameters, you can slightly see in his first screenshot that the MACD is set to to the typical 12,26,9. The Stochastic is set to 5,3,3.
I have two questions: Then i switched to the 5m. Chart and it seems more accurate. Do you think is a good idea to use the strategy consistently on the 5m. For example i want to go long. In this case all the conditions are met, BUT not at the same time. Hence, forex news is essential in keeping traders updated. So the major advantage with Forex Wot System is that they provide you with buy and sell signals and saves a lot of time for you which in general you lose a lot of time in analyzing the market conditions.
I would also like to know what are your settings for stochastics. Your email address will not be published. Leave this field empty. The Slow Stochastic Indicator. Executing Trades — Long Trades. How should we enter a long buy trade? Trade Management for a Long Trade. Executing Trades — Short Trades. Trade Management for a Short Trade. The Stochastic is set to 5,3,3 Looks like a solid use of two popular indicators. Thanks for the sharing.
Hello, thank you for this amazing strategy! Hi Just wondering what time frame you are using Cheers Colin. Hi Colin Arklay , Im using M15 time frame in london session only…. Leave a Reply Cancel reply Your email address will not be published.More...