Forex trading strategy #21 (Those 4 Indicators)
Submitted by User on May 26, 2009 - 22:17.
Submitted by Nariman Ghanghro
Hi guys,
I've been looking at this site and have gone through almost all of the Trading Strategies. I'm just new to Forex markets and previously dealt
with the Traditional Equtiy Market for a long time. Currently, I'm working on CFD (Contract for Difference) market where I buy and sell the
following:
1. Stock Indices (ASX in morning, FTSE and DAX in evening and DJIA during late night hours)
2. Commodities (mainly Gold, Crude and Silver)
3. Forex (Just started to look at Forex Trading, thanks to your site)
I've a trading system which I've used for a long time. Of course, like any trading strategy, its not the best system in world and has its
shortcomings. The major shortcoming I've seen is the fake (and perhaps too many) signals generated when the market is trading sideways.
If anyone has ideas on how to improve the strategy then it will be most welcome.
Here goes the strategy:
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THOSE 4 INDICATORS:
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Timeframe: 15 mins, 30 mins, 1 hour or 4 hours
Indicators:
1. CCI (Commodity Channel Index) with default setting of 14
2. Stochastic with default setting of 14, 2
3. Directional Movement Index with default setting of 14
4. MACD with 8 and 40 as MA and 8 as Signal line
GO LONG WHEN:
1. (CCI >= 0) AND
2. (Stochastic >= 50) AND
3. (MACD >= 0 OR DI >=0)
GO SHORT WHEN:
1. (CCI <= 0) AND
2. (Stochastic <= 50) AND
3. (MACD <= 0 OR DI <=0)
The Strategy has worked very well (for years) with Equities with high Volume (NASDAQ and FTSE being my favourite) and it has given amazingly
accurate signals on Stock Indices. I've posted two different examples to look at. First one is this morning's (27th May) ASX (Australian
Index) session. The other one is USDCHF Pair from 26thMay. You'll also see three Moving Averages on chart which I plot as a visual help,
these are EMA5, 20 and 100.
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Important Points:
1. Note that I'm based in Australia that is why I said I trade on Wall street when its late night here in Brisbane
2. Also note that in the screenshot example (ASX Index) every single Point has a value of 25 AUD (to give you some idea on Profit or ROI)
3. In this particular example (ASX Index), the Spread is 2 points for Long Positions and 3 points for Short Positions
4. I'm sure, this question will come up so I thought to answer it in advance. There is no Stop Loss method used as such, its just that I
follow the Signals quite religiously and exit the trade as soon as the Signal has changed from Long to Short or the other way round
5. PSAR Indicator can be used (as you can see in chart) as an additional confirmation
Cheers and happy trading,
Nariman Ghanghro
Edward Revy,
http://forex-strategies-revealed.com/
Copyright © Forex Strategies Revealed
may be.. many Forex strategies are successfully used for commodities trading. Try it.
Hi sir is this strategy works for gold,silver and oil?
The post above was mine.
I left the stoch indicator out and am using CCI14 - ADX50 - MACD8,40,8.
I'm trading on a 30M timeframe when the signals are good in both the 30M and 1H timeframe (late entry, but I'm happy with small profits).
Had about 55 pips last week (2days) using this strategy (my first profit of 75 euros BTW).
On 30 min timeframe, I aim for a 10 pip profit, mostly because of the late entry.
It sometimes late, but don't forget that other times it'll save you from a bad trade.
Thomas
When the MACD signal line passes the 0, it's sometime too late to enter a trade.. Right?
THis system is just wonderful and should be applied as it is. I love simple system, particularly the MACD i let it go above 0 line then i watch other indicators. Cool work there
Ayobami
Lagos
Nigeria
indeed a very nice confirmation system. i use something very similar however i don't use the stochastic crossing the middle as the last confirmation. it generally gets me into the trade too late. impressive system. it works well for me on the e-mini dow.
Sam from New Hampshire USA.
I have these indicators:
FX Sniper's T3 CCI.mq4
WCCISqueeze v1.mq4
Regards,
Edward
Bharat, I already asked guys about some indicators with histograms. It appears that we do not need histograms, just a line is enough.
Edward, Nariman or anyone..... need some help with the CCI for MT4..... the example screenshots from Nariman shows the CCI having histogram style bars..... I dont have those in MT4, its just a line..... is is necesssary to have the histogram bars? Or is it ok to simply wait for the CCI line to cross above or below zero? IF there is a difference and one needs to have histograms on the CCI, can someone post this indicator for MT4 on here please?
Just for information to all..... if you get the MT4 free demo version from www.alforex.com (its branded as AL Trade instead of Metatrader4), esssentially it is MT4, but they have EXPANDED it so that one can see the charts of the main US indices as well besides the forex charts. I find this great as I can then ave both forex as well as Dow JOnes, Nasdaq and S&P500 charts on one single platform, and I'm using various strategies on here on both currencies as well as indices successfully.
Anway, would be great if someone could tell me IF I have to have hostogram bars on CCI, and if yes, if someone could put a CCI indicator for MT4 on here that will show histogram bars please....... thankx Bharat
Yes, the multitime indicators in the upper right corner come from TRO.
I use GG-TrendBar_TRO_MODIFIED_VERSION for catching the overall trend (in combination with ADX, of course).
The other one that is ultimately the best is TRO_MM_MAXover. As a default it is set to show the cross of EMA12 and SMA12 but you can change the settings as you like. I set it to show EMA5(close)xEMA6(open). Why it is wonderful - it shows also the crosses that are not fixed yet by a candle close. So, you can easily notice potential (pending) moves.
The numbers at the screen come from TRO_PIVOT. I do not like to have too many lines at my screen, so I use the number version for planning my exits.
The basic indicator that alerts me about crosses is not TRO, it is MA_Crossover_Alert.
Regards,
Indrek
[email protected]
Hi Indrek, are those TRO indicators? If they are, what are the names of the trend and the mtf ma indicators? He got lots of indicators and I don't want to clutter the indicator folder. Also, MT4 has a limit of how many indicators you can have in that folder.
Nariman,
I am not good in drawing charts but I can post here the picture of my template to show you the indicators that I use:
As you see, I do not draw EMA5 and EMA6 lines to my chart because I have the arrows of my crossover alert indicator.
The green line is SMA10 that I use only for exits. When running a position for longer time, I exit when a candle closes at the opposite side of this SMA line.
At the upper right corner you can see two indicators. The upper one shows trend, the second shows EMA5xEMA6 in all timeframes. So, I do not have to switch the timeframes to have a full picture.
I believe that if I check these indicators plus ADX + CCI then the probability of bad entries is not too big even during ranging and choppy markets.
But, of course, I am just testing the system. I think at least some months are needed to make strong conclusions.
Indrek
Sounds great Indrek,
Have you been able to avoid generating signals during the Sideways Trading with the strategy you explained above ?
On the other hand, I'm also working on a couple of new strategies and the basic idea is to not only avoid the Sideways Markets but also to avoid taking trades in the opposite directions of long term movement of price by confirming at least 3 different timeframe charts.
Is it possible for you to post some charts based on the changes you explained ?
Cheers,
Nariman
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