Tuesday, October 18, 2011

Magic Breakout Forex Strategy

A breakout signal occurs when the price breaks a significant high and makes a new high. This is the definition. Another breakout occurs when the price breaks a significant low and makes a new low. Magic Breakout Forex Strategy is a simple system, It is easy to use but gives impressive results on forex trading.

Setup and Indicators for Metatrader;

  1. Timeframe 1 Hour Chart
  2. Pair GBPUSD or other currency pair
  3. CCI 20 (Commodity Channel Index, Period 20, Typical Price)
  4. EMA34 High, EMA34 Close, EMA34 Low. This three EMA-s will be treated as one indicator called The Wave. We will call them Wave-top, Wave-middle and Wave-bottom.

The Wave is a great tool that helps us to determine the trend. This is description to determine trend using The Wave;
Uptrend: The price has already crossed the Wave upward and the price is above the wavebottom at this moment.
Downtrend: Similarly, the market is trending down if the price is below the the Wave-top.

Long Entries

  • Be sure that the market is trending up.
  • Price was above the Wave for some time. (above the Wave-top)
  • Price entered the Wave. Price was above the Wave and then crossed the Wave-top downward.
  • CCI crossed +100 line upward; A POSSIBLE LONG ENTRY SIGNAL on the next candle open. This is a good signal to go long on the next candle open. But be careful...
  • “Five bars check” rule. Check that CCI was below the +100 line for at least five bars before the cross.
  • Check that the market is trending up now. Check that the price is above the Wave-bottom as with the first rule.
  • Buy now! If all above is filled, buy as new candle opens.

Simply said, price entered the Wave and then returned back up. But this sentence sounds too subjective. We have put it all into mechanical rules that are easy to follow.
Don't enter the market when you “feel” that the price is going up again. Some traders do so, but they get stuck when the price plunges lower! Don't rely on the standard breakout system. The breakout may be false. Enter only if CCI crossed the line! Look at the picture carefully. Do you see that we have entered the market before the breakout... before the crowd?! Do you see the great advantage of the MagicBreakout strategy?

Short entry:

  • CCI crossed the -100 line downward.
  • Look at CCI when the candle has closed. Was it above the -100 line for at least five bars? Is it below the -100 line now? If yes, continue to the next step. We have to check market conditions. Is price trending down? Is price below the Wave-top? (Stick with our definition! Don't let your feeling or intuition to define the trend! Trend definition is a mechanical task here, although sometimes counterintuitive.) If yes, go to the next step.
  • Do you see a valid swing pattern? Train your eyes on the first few trades and you will see the swing pattern subconsciously without reviewing the rules. Review: price was below the Wave and then entered the Wave (in other words, price crossed the Wave-bottom upward). OK?
  • Sell now! And prepare your exit targets...

Exit rule

Plan your trade, trade your plan. Let's assume we have opened a long position. We must take care about
profit target and stoploss right after entry.

  • Place the first profit target (sell-limit order) at 1.618 Fibonacci level;
  • Place the second profit target (sell-limit order) at 2.0 Fibonacci level;
  • Place stoploss (sell-stop order) at 0.0 Fibonacci level.

As the price hits our first target, close a half of the position (so we recommend you to trade at least two
lots/minilots). As the price hits our second target, sell the rest. Place stoploss just two pips below the
0.0 level. The low acts as support and if broken, the trend is probably over.

Exit from a short position:

  • Place the first profit target (buy-limit order) at 1.618 Fibonacci level;
  • Place the second profit target (buy-limit order) at 2.0 Fibonacci level;
  • Place stoploss (buy-stop order) at 0.0 Fibonacci level.

More complete instruction please download and read free Magic Breakout Forex Strategy eBook 

Tuesday, July 19, 2011

S'ema Forex Trading Strategy

This forex strategy called S'ema because it uses a combination of several indicators like ema and sma forex trend line. S'ema currently in stages of development and is been testing. So far it works well and effective in predicting price movement of any currency pair. During ranging/consolidation market the result is quite good, and when market in trending the forex strategy give a better results.

S'ema forex strategy works effective in almost any currency pair so far. In any chart time frame. Recommended to use in 15 min time frame and use 4H chart to see of the overall trend. But not recommended for use trading longer than day-chart.

Set up for S'ema forex strategy:

  • Candle stick
  • BB(14,2)
  • EMA(10)
  • EMA(20)
  • EMA(50)
  • EMA(100)
  • EMA(200)
  • STOCH, FULL (14,3,3)
  • ATR (14)

Long Position:
  1. See uptrend by direction of EMA's: open up in the same direction, at least EMA (200) is underneath
  2. In Stochastic, crossover below 20 line
  3. Crossover of EMA(10) SMA(14) (EMA should cross over SMA upwards)
  4. Close of the entire candle stick above and after crossover of EMA(10)&SMA(14)

Trigger: The close of the candlestick

Target: Recent swing high OR next 00/50 number (i.e. 1.4000, 1.4050)

Stop: The price of swing low extended with ATR(14) value. (i.e. swing low is 1.4089, and ATR(14) is 14; then, the stop is 1.4075)

Short Position:
Do the opposite. Stochastick must have crossover above 80 line. And Candlestick must close below the MA crossover.

Volatility: More distance between EMA's, more volatile.
Note: that in high volatility, it's ok to get in trade even if the only body part of candle is above the crossover.

Trendiness: More EMA's are in same direction, more trendy.
Note that if the price movement is so trendy (a.k.a. all EMA's are in same direction and fanning out upwards), it's ok to be greedy for the take profit (i.e. skipping one 00/50 value).

For really greedy trader and risk taker, it's not too bad to trade with this S'ema forex strategy against the trend as long as for the short term (i.e. 15-min chart).

Source: Babypips.com

Monday, June 27, 2011

5M Kevinator Retracement Forex System

5m Kevinator Retracement Forex System is a forex strategy that is run based on the trend by using the multi time frame stochastic indicator see the current market trend. This forex system was used for major currency pairs only (EURUSD, USDCHF, GBPUSD, AUDUSD, USDCAD) in 5 minutes chart only. If the market is stepping up then you take buy retracement bars.If the market is stepping down you take the sell retracement bars.

Retracement bars are the magneta (purple) bars on the indicator on the bottom. If the market is stepping down you take the downward magneta bars as entry. If the market is stepping up you take the upward magneta bars as entry.

You can either enter the market (long term) when the mtf stochastics is changing directions and hold until trend is done or at any of the retracement bars going in the direction of the trend and hold (20-400 pips).

You can scalp the market by finding the direction of the current trend (stepping up or stepping down) and entering the retracement bars and taking 5 to 20 pips profit.

There are two ways to trade this system but the entry rules are solid.We have a solid method to define a trend (mtf stochastics) and a solid entry method ( enter on retracements).

It is up to you how much profit you take as you could be following a trend for days or just scalping all day long for short profits.

5M Kevinator Retracement Forex System image 1

5M Kevinator Retracement Forex System image 2

5M Kevinator Retracement Forex System image 3

If you're interested by this forex system download 5M Kevinator Retracement Forex Indicator here DOWNLOAD

Source: Forexfactory.com