The 5-34-5 Forex oscillator strategy is designed to deal with the most immediate trend and provides easy to understand buy and sell signals on any pair.
Entry signals are only issued when the trading setup confirms a shift in price action.
Based on a risk management perspective, the 5-34-5 Forex oscillator strategy is designed to always engage the market with a superior risk to reward ratio.
Irrespective of your trading approach, make sure to always include a stop loss so that you know the total risk of the trade.
This is critical for your success.
Let’s go straight to the actual trading setups that shows how to trade the 5-34-5 forex oscillator strategy.
Chart Setup
MetaTrader4 Indicators: chande-kroll-stop.ex4 (Inputs Variable Modified; ATRPeriod=20), 5-34-5-oscillator.ex4 (Default Setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week
Recommended Trading Sessions: Any
Currency Pairs: Any pair
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a bullish trade if the following indicator or chart pattern gets put on display:
- If the light blue line of the 5-34-5 Metatrader 4 forex indicator break above the 0.00 signal level as shown on Fig. 1.0, price is said to be pushed to the upside i.e. a signal to buy the designated currency pair.
- If the red line of the chande-kroll-stop indicator intersects the blue line in a bottom up fashion as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish i.e. a trigger to buy the desired forex pair.
Stop Loss for Buy Entry: Place stop loss below the most recent swing low price.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If the red line of the 5-34-5 indicator drops below the zero center line as exemplified on Fig. 1.0, bulls power is said to be weaning, hence an exit or take profit is duly advised.
- If the red line of the chande-kroll-stop indicator intersects its blue line to stick out above it, price is said to be making a probable U-turn, hence an exit or take profit is highly recommended.
Sell Entry Rules
Go short if the following setups gets displayed successfully on the activity chart:
- If the light blue line of the 5-34-5 forex indicator dip below the zero center line as illustrated on Fig. 1.1, price is said to be driven lower, as such a sell signal is said to be looming.
- If the blue line of the chande-kroll-stop indicator crosses the red line in a top downward manner as exemplified on Fig. 1.1, the general market sentiment is said to be bearish i.e. a trigger to go short on the designated currency pair.
Stop Loss for Sell Entry: Place stop loss above the most recent swing high price.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the red line of the 5-34-5 indicator surges above the 0.00 signal level (see Fig. 1.1), it is an indication of halting bears power, as such an exit or take profit will suffice.
- If the blue line of the chande-kroll-stop indicator intersects its red line to stick out below it during a bearish trend, price is said to be making a likely bullish reversal, hence a trigger to exit or take profit at once.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The 5-34-5-oscillator.ex4 indicator is a unique custom technical tool that oscillates around a zero reference level using a light blue and red lines.
It is known to offer information on the direction of the trend.
The chande-kroll-stop.ex4 custom indicator is a trend-following indicator that pinpoints the stop loss for a long or short position by using a variation on directional movement.