FREE FOREX STRATEGIES

Forex trading strategy #21 (Those 4 Indicators)


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


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Hi everyone,

Just thought to post a new screenshot to show you how this particular system can be used on short term (1 min) chart as well. However, you got to be extremely careful as you'll get a lot of fake signals while the market is trading sideways.

To avoid Sideways, you need to identify key Support / Resistence Lines by looking at the previous highs and lows and wait for the break-outs from that point.

PS: This screenshot is taken just 5 minutes back from FTSE100 Future Index and just now the Index has touched 4669 points which was todays Resistence-2. My Price Target was 4668. For FTSE Index, every single point is worth 25 GBP and the spread is 2 points for Long positions.

Trading strategy

Good luck once again.
Nariman

Nariman,
I would be very happy to hear from you why do you use CCI and not RSI, for example.
Indrek

Hi Indrek,

I'm glad that you asked this question, in fact its a very nice question. I'll try to explain a bit:

Although, the Traders are told NOT to look for Tops and Bottoms but you'll also agree that its perhaps our greatest dream to detect the Tops and Bottoms and maximize on our profits. If you do some research on the CCI, you'll come to know that the original purpose of formula of CCI was not to apply it in Stock Markets. It was originally designed to solve engineering problems regarding Traffic signals, the formula was later applied to the Equity Market in an attempt to identify the major turn-arounds.

On the other hand, we already have Stochastic as our Over-Sold / Over-Bought indicator applied in this particular system. RSI is another indicator which works on the same Over-Sold / Over-bought concept, however there are some fundamental differences between the way they work, such as:

Relative Strength Index yields the most meaningful results in trending markets
Stochastics work both the flat as well as trending markets
The RSI helps determine when a price has moved too far too fast
Stochastics helps determine when a price has moved to the top or bottom of a trading range

As you can see the combination of Stochastics and CCI works very well to identify the Tops / Bottoms / Reversals and that is why I've always prefered using this particular combination. However, it also pays to get a confirmation sometimes from RSI.

Cheers,
Nariman

Hi Nariman,
After some analysis and demo trading, I have mixed this system with another one. I have left MACD out of the game. My first trading signal comes from the cross of EMA5 and EMA6 at H1 chart. After that, I check ADX, CCI, Stoch at H1 chart and the trend at Daily chart (if EMA5 and EMA6 have crossed there already to the same direction). If all those factors match, I take the trade at once.
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

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:

Forex example

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

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.

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
indrek.forex@gmail.com