Currency Cross Trading" Strategy
What you have in front of you is a trading Currency crosses trading strategy". The strategy is indicative, it uses cross pairs, as well as high timeframes.
Currency crosses - are currency pairs in which one currency is valued in units of another currency without the participation of the U.S. dollar. Currency rates of such currency pairs are known as cross rates.
The most popular currency crosses are those that include the euro: EUR/JPY, EUR/GBP and EUR/CHF. These three pairs have a relatively high volatility due to low liquidity compared to other crosses. In fact, the EUR/CHF may even be more volatile than the USD/CHF from time to time, as it is the pair of choice for institutional players who want to trade the Swiss franc.
Another popular group of currency crosses includes the Japanese Yen: GBP/JPY, EUR/JPY. Traders and investors like yen crosses because of the carry-trade deals that come into play here. Carry trade is the sale of some currency with a relatively low interest rate, such as the yen, and the purchase of a currency that carries a higher interest rate, trying to get the difference between the two rates.
The rules of the trading strategy "Trading currency crosses
We need 3 indicators to work: CCh, CCFp and trend. Please note, since the indicators are custom indicators, they have a large number of parameters.
CCh indicator parameters: MA_Method 3, Price 6, Line_Thickness 2, All Bars 0, Last_Bars 0, mn_per 12, mn_fast 4, w_per 12, w_fast 4, d_per 12, d_fast 4, h4_per 12, h4_fast 4, h1_per 12, h1_fast 4, m30_per 12, m30_fast 4, m15_per 12, m15_fast 4, m5_per 12, m5_fast 4, m1_per 12, m1_fast 4.
CCFp indicator parameters: MA_Method 3, Price 6, Fast 3, Slow 5.
Parameters of the Trend indicator: WATR_K 10, WATR_4.0, ATR 21.
Determining the direction of currency crosses
Two adjacent timeframes (H1 and H4, H4 and Daily, Daily and Weekly, Weekly and Monthly) are used to determine the direction of the pair. The crossover of currency moving averages serves as a signal. For example: If the moving average of the JPY goes downwards and crosses a moving average of the EUR, which goes upwards, first on the H1, then on the H4, this signal shows that the EURJPY will rise, and you can open a buy.
If the moving averages are crossing in the opposite direction, i.e. the JPY moving average goes upwards and crosses the EUR moving average, which goes downwards, first on the H1 then on the H4, this signal indicates that the EURJPY will fall and you can open a sell.
CCh indicator is more mobile and generates more signals, we use it to look at the direction of movement for each day, CCFp It is less mobile, it also shows fewer signals, and it is desirable to watch the general mood of the market.
Rules of entering the market according to the strategy
Having determined the direction of movement on the CC, we need to find the entry point into the market. To do this, we use the Trend and Stochastic Oscillator indicators and the lower timeframes M5-M15.
The signal to buy: We open from the lower boundary of the Trend indicator, StopLoss is set behind the lower boundary of the indicator, with Stochastic Oscillator is in the oversold area and crosses the 80 level from bottom to top. We set TakeProfit three times larger than StopLoss. We set the breakeven at the level of 30-50 points.
The sell signal is mirrored.
Examples of trading strategies
Buy signal
Sell signal
