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Exit strategy #9 (Keep every pip)

This is an exit method for those who hate "losing those pips" which come with a great market move and then vanish immediately (or shortly after) on a reverse.

When the price shoots (up or down), it creates an out of the range tall candlestick.

Many traders know about this fact, but the main challenge is that when you look at the charts how do you tell when the candle is tall enough and when not.

The solution came with this interesting indicator that combines similar to Bollinger bands algorithm and Candle Length Volatility.
Download: Val_Bands.mq4

Red histogram: the length of the candle in pips.

Bands: the average of the candle length with standard deviation.
- Yellow band: reading above it suggests that a candle is taller than usual, and it's the time to Take profit. (Also, don't open any new trades there).
- Blue band: reading close to it - an active trend.
- Pink band: reading below it - ranging market. (Crossing the pink line from below - beginning of a trend).

You can use this indicator for exits/TPs on any time frame for any type of trading: from scalping on 1-5 min to position trading on 1-4 hour or daily charts.

The width (deviation) of the bands can be changed to improve sensitivity of the indicator.

Other notes:
1. It is also interesting to look at this indicator in combination with Volume.
2. Another idea would be to combine it with Divergence trading to identify market reversals.



Edward Revy
http://forex-strategies-revealed.com/


thanks a lot edward, this indicator is very interesting.

everyone probably knows we shouldn't enter trades on big candles, but how big is big?

now this indicator provides us with a standard to follow. that's exactly what we need.

Thanks for the strategy Edward.It is a good way to know when to exit our trade.But I want to ask one question.

What if the candle formed is bearish shaven or bullish shaven? Do we have to exit Since it is a good sign of the market is downtrend or uptrend?

Thanks
dstroke

If we have a bullish shaven or a bearish shaven (a tall candle with no shadows)

we stay in a trade for at least one more candlestick, since it's a sing of a strong move which isn't ready to stop yet: no shadows mean that one side (bulls or bears) is 100% in control of the move.

Kind reagrds,
Edward

hi Edward,

how can i get this indicator for AmiBroker?

Unfortunately, I'm not familiar with AmiBroker platform, and ways to create/write indicators there, I'm very sorry.

Kind regards,
Edward

Hi Edward,

Can I use it on GBPUSD in 1h time frame? I`m asking becouse when it shows to close position price is keep going up and loosing about 25 pips on every position. Can you give me adapted modify for GBPUSD 1h

The goal to catch every pip up to the top is rather not realistic.

I haven't suggested the time frame or the currency pair, which means you can certainly try it out in different conditions.

Kind regards,
Edward

what settings are you using there in the indicator??