Forex Master Level trading strategy: full set of tools
Среднесрочная торговая система. Во время работы используются два экрана. Первый (основной) таймфрейм – H4. Второй (вспомогательный) – D1. Индикаторы, используемые при принятии торговых решений, — набор скользящих средних (простых и экспоненциальных), осциллятор (RSI), паттерны свечей, дневные уровни поддержки/сопротивления и уровни Фибоначчи. Если используется скользящий стоп, то в качестве ориентиров при его перемещении может использоваться наклонная трендовая линия, построенная по фракталам.
Trading strategy settings:
- Currency pairs: Any currency pairs with high volatility (preferably GBP/JPY)
- Timeframe: working - H1, auxiliary - D1.
- Bidding time: any.
- Risk Management: After calculating the stop-loss, choose such a volume of the lot that the risk was no more than 2-5% of the deposit per trade.
Setting the system indicators:
- Unpack the archive.
- Copy the template into the templates folder.
- Restart the terminal.
- Open the chart of the desired currency pair.
- Install the FXMasterLevel template.
The following set of indicators is used in trading: EMA 5; SMA 5, SMA 21, RSI 5 and fractals. The chart should look like the one shown below. In addition, you should add support and resistance levels and, in some cases, a sloping trend line.
Moving averages
A trend is considered bullish if the price is above moving averageand bearish - if lower. This trading system uses several moving averages to determine the trend more accurately. With this in mind, a trend is considered bullish if the price is above the fast moving average, which, in addition, crosses the slow moving average from bottom to top. The opposite is true for a bearish trend. The price is below the fast moving average, which intersects the slow moving average from top to bottom.
RSI Oscillator
At RSI oscillator A simple moving average with a period of 21 is superimposed for a more clear display of upward and downward price movement sections. The methodology for determining the trend on RSI is the same. When the moving average crosses from bottom to top - up trend, from top to bottom - down trend.
Fractals
In technical analysis, fractals are used to predict a price movement in the opposite direction. Fractals have five bars and can be upward or downward. An upwards pattern appears when the price of the middle candle is higher than the price of the two outermost candles from either side. In the case of a downtrend, it is the other way around.
Trend lines
We will draw sloping trend lines by significant fractals.
Support/resistance levels
Support and resistance levels are plotted on the daily chart and help determine re-entry points and places to lock in profits or losses.
When constructing the horizontal lines on the levels of maximum and minimum prices in the candle in the previous day.
If the price touched a support/resistance level, we can re-enter the market, but only if the rest of the rules for entering the trade are followed. Also these levels can be used to set a stop loss. If you open long positionThe stop loss is set at the level of the minimum of the previous day, if short - at the level of the maximum.
If the support/resistance levels turn out to be "untouched" by the price, they remain correct on the following days.
Candlestick patterns
When making trading decisions, the following candlestick patterns can be used as an additional indicator: bear/ bullish absorption patterns, hammer and inverted hammer.
Bullish takeover pattern occurs when the body of a bullish candle completely overlaps the body of a bearish candle (see figure above). The shadows are not taken into account. In fast-moving markets a bullish candlestick may open 7-10 points above the closing price of the previous bearish candlestick (i.e. be inside it). Such a structure is also regarded as a bullish absorption pattern.
Bearish takeover pattern occurs when the body of a bearish candle completely overlaps the body of a bullish candle. Again, the shadows are not taken into account.
Inverted Hammer - A bearish candle with a large upper shadow and a small body.
Fibonacci level 161.8%
The 161.8% level can also be used as an additional reference point when setting a take profit on the 4-hour chart when price breaks the support/resistance level. The grid is stretched between the point of intersection of the averages (5 SMA and 5 EMA) and the minimum/maximum of the previous day (depending on which way the position is opened).
For example, if you open a long position, the grid is stretched as follows:
Signals indicating the opening of a long position (buying):
1. There should be an uptrend on the daily chart that satisfies both of the following criteria:
- The blue moving average (5 EMA) should be above the red (5 SMA) and green (21 SMA) moving averages.
- The RSI should be above the green moving average (or cross it from bottom to top).
2. If the trend is directed upwards, mark the minimum/maximum of the previous day. The minimum will be the support level. The maximum will be a resistance level.
3. Move to the graphH4 to find the entry point
Aggressive entry
- The blue moving average crosses the red moving average from bottom to top.
- The RSI crosses the green moving average from bottom to top.
Conservative approach
- The blue moving average crosses the green moving average from bottom to top.
- The RSI crosses the green moving average from bottom to top (condition is not determinative).
4. look for candlestick patterns on the chart that confirm the entry point. This step is not necessary, because the desired pattern may not appear.
- A bullish takeover pattern or hammer may appear before the blue moving average crosses the red (or green) moving average.
- If the desired pattern does not appear, open a trade when the conditions above are met.
5. Open a trade at the time of a moving average crossover, or oscillator crossover of the moving average (depending on which signal appears last).
6. Stop Loss is placed at the support level.
7. Take Profit is placed at one of the following levels:
- At the level of the green moving average.
- At the level of the white moving average.
- At the level of resistance.
- At the 161.8% level of the Fibonacci grid (if price has broken the resistance level).
8. If take profit is not set, then you can exit the trade if one of the following conditions is met:
- When the blue moving average crosses the red one from top to bottom.
- When the RSI crosses the green moving average from top to bottom.
- When a bearish takeover pattern appears, or an inverted hammer.
- When price crosses a sloping trend line.
Signals indicating the opening of a short position (sale):
1. There must be a downtrend on the daily chart that satisfies both of the following criteria:
- The blue moving average (5 EMA) should be below the red (5 SMA) and green (21 SMA) moving averages.
- The RSI should be below the green moving average (or cross it from top to bottom).
3. If the trend is downward, mark the minimum/maximum of the previous day. The minimum will be the resistance level. The maximum will be a support level.
3. Move to the chartH4 to find the entry point
Aggressive entry
- The blue moving average crosses the red moving average from top to bottom.
- The RSI crosses the green moving average from top to bottom.
Conservative approach
- The blue moving average crosses the green moving average from top to bottom.
- The RSI crosses the green moving average from top to bottom (the condition is not determinative).
4. look for a bearish absorption pattern on the chart, or an inverted hammer to confirm the entry point (if the patterns do not appear, open the trade when the conditions above are met).
5. Open a trade at the time of a moving average crossover, or oscillator crossover of the moving average (depending on which signal appears last).
6. Stop Loss is placed at the support level.
7. Take Profit is placed at the same levels as the purchase.
8. If take profit is not set, then you can exit the trade if one of the following conditions is met:
- When the blue moving average crosses the red moving average from bottom to top.
- When the RSI crosses the green moving average from bottom to top.
- When a bullish absorption pattern appears, or a hammer.
- When price crosses a sloping trend line.
An example of a buy deal:
