The Accumulation Forex trading strategy is designed to spot divergences and enables traders initiate great entries and exits based on the spotted divergences between price and technical indicator.
Traders can then determine whether bigger investors are generally accumulating (buying) or distributing (selling) the forex pair.
Using our set of rules, it becomes clear that the Accumulation Forex trading strategy can be used to identify high probability price reaction zones.
The strategy can effectively spotlight buying and selling pressures on a forex pair.
This offers an amazing way to confirm ongoing trends or reversals, so traders can quickly ride the profits.
Chart Setup
MetaTrader4 Indicators: Accumulation.ex4 (Default Setting), pz-lopeztrend-indicator.ex4 (Inputs Variable Modified; Amplitude=4)
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 price forms lower lows as seen between Point A & B, while a corresponding higher low is formed by the Accumulation Metatrader 4 forex indicator on Point C & D as illustrated on Fig. 1.0, price is said to be in a bullish divergence, as such a trigger to go long on the designated currency pair is recommended.
- If the line of the pz-lopeztrend-indicator.ex4gets colored deep sky blue following a bullish divergence (see Fig. 1.0), price is said to be pushed higher i.e. a trigger to go long on the designated currency pair.
Stop Loss for Buy Entry: Place stop loss below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If the Accumulation indicator forms a bearish divergence while a bullish trend is running, more bulls are said to be closing their positions, hence an exit or take profit will suffice.
- If the line of the pz-lopeztrend-indicator.ex4turns tomato during a bullish trend, a bearish reversal is said to be looming, hence an exit or take profit will do.
Sell Entry Rules
Go short if the following setups gets displayed successfully on the activity chart:
- If price forms higher highs as seen between Point A & B, while a corresponding lower high is formed by the Accumulation indicator on Point C & D as exemplified on Fig. 1.1, price is said to be in a bearish divergence, hence a trigger to go short on the selected forex pair is advised.
- If the line of the pz-lopeztrend-indicator.ex4gets colored tomato following a bearish divergence (refer to Fig. 1.1), price is said to be driven lower i.e. a trigger to go short on the stipulated forex pair.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the Accumulation indicator forms a bullish divergence while a bearish trend is ongoing, more bears are said to be closing their positions, hence an exit or take profit will be sufficient.
- If the line of the pz-lopeztrend-indicator.ex4turns deep sky blue during a bearish trend, a bullish reversal is said to be on the horizon, hence a trigger to exit or take profit is apt.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The Accumulation indicator is a technical studies created by Marc Chaikin to determine the flow of money into or out of a security.
It gives traders information regarding buying and selling pressures on a given currency pair.
The pz-lopeztrend-indicator.ex4 is deployed to track market trends via a dual colored line surrounded by a dotted line price band that sits above and below the dual colored line.