AMA Optimized Forex Trading System

The AMA Optimized Forex Trading system is built to adapt to current market conditions while making good pips for the trader.

As a winning trading system, it is able to offer traders more insight into what they should do to accrue profits when certain price setups are on display.

There are essentially two main parts to this trading strategy:

The first part entails pinpointing the trade setup using the ama optimized indicator while the second part is the confirmation of such setups using the macd colored indicator.

Entry and exit rules are clearly defined, and at this point we will delve into explaining the practical application of this strategy.

Chart Setup

MetaTrader4 Indicators: ama-optimized-indicator.ex4 (Inputs Variable Modified; periodAMA=24), macd-color-indicator.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:

  1. If the blue dotted grey line of the ama-optimized-indicator stay somewhat below the candlesticks as depicted on Fig. 1.0, price is said to be pressured to the upside i.e. a trigger to go long on the designated currency pair.
  2. If the lime green histograms of the macd-color-indicator gets positioned above the 0.00 center line as shown on Fig. 1.0, bulls are said to be riding price higher i.e. a trigger to buy the selected forex pair.

Stop Loss for Buy Entry: Place stop loss below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If the ama-optimized-indicator pops up a red dot on its gray line while a bullish trend is running, price is said to be making a possible bearish reversal, therefore an exit or take profit is recommended.
  2. If the macd-color-indicator displays a red histogram that gets positioned below the 0.00 horizontal level (see Fig. 1.0), price could be trailing an imminent reversal, as such an exit or take profit stance is advised.

Sell Entry Rules

Go short if the following setups gets displayed successfully on the activity chart:

  1. If the red dotted gray line of the ama-optimized-indicator stay fairly above the candlesticks as exemplified on Fig. 1.1, price is said to be heading lower i.e. a trigger to go short on the listed forex pair.
  2. If the red histograms of the macd-color-indicator gets positioned below the 0.00 center line as seen on Fig. 1.1, bears are said to be having the upper hand in the market, therefore a sell alert will suffice.

Stop Loss for Sell Entry: Place stop loss above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the ama-optimized-indicator pops up a blue dot on its gray line during the course of a bearish trend, price is said to be making a possible U-turn, as such an exit or take profit will do.
  2. If the macd-color-indicator pops up a lime green histogram that gets aligned above the 0.00 horizontal level (refer to Fig. 1.1), bear power is said to be weaning, as such an exit or take profit stance is recommended.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The ama-optimized-indicator.ex4 is a trend-following indicator that is built on moving averages.

Its blue or red dotted gray line represents a bullish or bearish trend respectively.

The macd-color-indicator.ex4 is a technical tool that is similar to the traditional MACD indicator.

It is known to alter the color of the histogram based on changes in the current market situation.

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