Trading strategy "By inertia"
В of the "Inertia" trading strategy three timeframes are used: H4, H1 and M15. You can also try other charts, but it is important that each of them be 4-5 times smaller than the previous one. We use the chart of the largest timeframe as an indicator of the main movement, the middle one - to determine the movement against the main movement and the smallest one - to enter a position.
Strategy indicators
On the H4 chart we use:
1) EMA(13) apply to CLOSE - exponential moving average. Used to confirm the indicator MACD.
2) Moving Average Convergence/Divergence (12, 26, 1) apply to CLOSE. Trend indicator to indicate the current movement. Only the histogram is used.
On the H1 chart we apply:
1) Stochastic Oscillator (6, 2, 3), prices - low/high, MA - EXP method. The indicator finds overbought/oversold conditions. We also change the levels from 80 to 70 (overbought) and from 20 to 30 (oversold).
On the M15 chart:
1) Stochastic Oscillator (14, 3, 3) prices - low/high, MA method - EXP. Set levels: overbought - 80, oversold - 20.
Rules for Buying Entry
1) On H4. EMA and MACD are growing simultaneously. At least two bars should pass with the growing EMA.
2) On H1. waiting for Stochastic to fall to the level of 30. It is enough to touch the line %K of this level. The %K line should be touched after the black candle closes.
3) On M15. waiting for Stochastic to fall to the level of 20, then start to rise, and the price will close above this level. Again it is enough to see the %K line rise above this level.
Sell transactions are made under the opposite conditions.
Options for closing positions
Exact options for closing a position on "Inertia" strategies no. It is assumed that the trader, depending on the TFs used, will decide on this issue himself. To work with the three timeframes given in the example, stop orders of 20 pips and take profit orders of 40 pips are recommended.
Closing a position if:
1) Price has reached the stop loss (loss) or take profit (gain).
2) When the histogram reverses on H4, if position trading is in progress.
3) If the trade is moved to the breakeven point and the price in the reverse movement kicks out this stop.
The "By Inertia" strategy requires a lot of time for observation, which is certainly not a plus, but if several currency pairs are connected, this problem can be partially solved. In addition to observation, time is required to monitor the position if you have to hold it for a long time.