One of the key things to look for when trading is trend strength. Knowing which currencies and currency pairs are trending strongly gives traders a distinct advantage.
Trend strength is often associated with momentum. Traders who can identify which currency pairs are trending with strong momentum allows them to trade in the currency pair which gives them the best chance to earn profits.
Not only that, trends with strong momentum also tend to move strongly in one direction. This allows traders to earn bigger yields in each winning transaction. This allows for a unique blend of a decent win rate and a high reward-risk ratio.
There are many ways to identify trend strength. Some use multiple moving averages to gauge the strength of a trend. Others use currency pair correlation to isolate strong currencies from weak currencies. Others use a variety of indicators to measure trend strength.
Trend Strength Signal Forex Day Trading Strategy uses indicators that gauge momentum to identify currency pairs with a strong momentum. This allows traders to objectively identify markets and pairs which are worth trading from currency pairs that have a low win probability.
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It measures the strength of the bulls and the bears in the market based on the Relative Strength Indicator (RSI). It then indicates the direction of the trend by displaying bars on a separate window. These bars are somewhat binary. Bars are either + 0.0001 or – 0.0001. Positive bars indicate a bullish trend while negative bars indicate a bearish trend.
The BS Trend indicator is an excellent trend filter which helps traders identify if the trade signal generated based on other factors are congruent with the direction of the momentum. It could also be an excellent entry or exit trigger as it is also very responsive to trend changes.
Arrows and Curves
Arrows and Curves is another trend indicator which is based on momentum.
It is composed of an upper and lower band. The area between the bands indicate the normal dynamic range of the current price movement. Price going over the bands are considered to have strong momentum. Entry signals are generated whenever a candle closes beyond the upper and lower bands. The indicator then prints an arrow pointing the direction of the momentum whenever it detects an entry signal.
This trading strategy provides trade signals based on momentum strength.
Trades are filtered based on the general trend direction as indicated by the 50-period Simple Moving Average (SMA). Trend direction is based on the location of price in relation to the 50 SMA, as well as the slope of the 50 SMA.
Trade signals are then considered whenever the BS Trend indicator and the Arrows and Curves indicator are in confluence, indicating that momentum strength is building up in the direction of the trend.
- BullBearRSI (default settings)
- 50 SMA
- ArrowsAndCurves (default settings)
Preferred Time Frames: 15-minute chart
Currency Pairs: major and minor pairs
Trading Session: Tokyo, London and New York sessions
Buy Trade Setup
- Price should be above the 50 SMA line.
- The 50 SMA line should be sloping up indicating a bullish trend direction.
- The BS Trend indicator should be printing positive bars indicating a bullish momentum based on the RSI.
- The Arrows and Curves indicator should print an arrow pointing up indicating a bullish momentum entry signal.
- Enter a buy order on the confirmation of the conditions above.
- Set the stop loss on the fractal below the entry candle.
- Close the trade as soon as the BS Trend indicator prints a negative bar.
- Close the trade as soon as the Arrows and Curves indicator prints an arrow pointing down.
Sell Trade Setup
- Price should be below the 50 SMA line.
- The 50 SMA line should be sloping down indicating a bearish trend direction.
- The BS Trend indicator should be printing negative bars indicating a bearish momentum based on the RSI.
- The Arrows and Curves indicator should print an arrow pointing down indicating a bearish momentum entry signal.
- Enter a sell order on the confirmation of the conditions above.
- Set the stop loss on the fractal above the entry candle.
- Close the trade as soon as the BS Trend indicator prints a positive bar.
- Close the trade as soon as the Arrows and Curves indicator prints an arrow pointing up.
This trading strategy has a unique balance between a decent win ratio and a high reward-risk ratio.
Most of the losing trades would cause small losses on the account. However, the winning trades usually produce huge gains. This allows traders to profit over the long run.
Momentum signals generated by both indicators tend to be very reliable if the trades are taken in the direction of the main trend.
Forex Trading Strategies Installation Instructions
Trend Strength Signal Forex Day Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Trend Strength Signal Forex Day Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Trend Strength Signal Forex Day Trading Strategy?
- Download Trend Strength Signal Forex Day Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Trend Strength Signal Forex Day Trading Strategy
- You will see Trend Strength Signal Forex Day Trading Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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