AMMA Forex Trading Strategy

The AMMA forex trading strategy integrates three technical indicators in delivering buy/sell forex signals. It is critical to watch out for the entry/exit rules once added unto the trading chart.

Chart Setup

MetaTrader4 Indicators: i-AMMA.ex4 (default setting), IDWma.ex4 (default setting), RAVI.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour

Recommended Trading Sessions: New York Open & London Open

Currency Pairs: Any pair with low spread

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following rules holds true:

  1. If the red IDWma.ex4 indicator line crosses the gold i-AMMA indicator line bottom up, with the candlesticks opening and closing above the lines, price is said to be pressured higher i.e. a buy signal is in place.
  2. If the green colored histograms of the RAVI custom indicator is align above the 0.00 signal level, price is said to be bullish i.e. a buy signal is in place.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from position(s) if the following rules or conditions holds true:

  1. If the red IDWma.ex4 indicator line crosses the gold i-AMMA indicator line top downward, or if price closes below the gold line of the i-AMMA custom indicator as shown on Fig. 1.0, it is appropriate to exit or take profit accordingly.
  2. If the green colored histograms of the RAVI custom indicator diminishes and subsequently forms below the 0.00 signal level, it is a trigger to exit or take.

Sell Entry Rules

Enter a sell in the marketplace if the following chart patterns are in display:

  1. If the red IDWma.ex4 indicator line crosses the gold i-AMMA indicator line top downward, with the candlesticks opening and closing below the lines, price is said to be pressured lower i.e. a sell alert.
  2. If the green colored histograms of the RAVI custom indicator is align below the 0.00 signal level, price is said to be bearish. The sell trigger is said to be stronger when the histogram is colored red..

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

Exit Strategy/Take Profit for Sell Entry

Exit or take profit in the market if the following rules or conditions are true:

  1. If the red IDWma.ex4 indicator line crosses the gold i-AMMA indicator line bottom up, or if price closes above the gold line of the i-AMMA custom indicator as shown on Fig. 1.1, it is a trigger to exit or take profit.
  2. If the green colored histograms of the RAVI custom indicator recoils to the upside and subsequently forms above the 0.00 signal level, it is a trigger to exit or take.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The i-AMMA.ex4 is a 25-day Average Modified Moving Average that is deployed as a filter.

The Inverse Distance Weighted Moving Average (IDWma) is a custom indicator that is most sensitive to price moves.

The RAVI indicator (Rapid Adaptive Variance Indicator) was designed by Tushar Chande to aid spot if the market is in a trend.

The RAVI indicator displays the difference (in %) between the current price and the past prices.

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