Aroon Forex Trading Strategy For Beginners

The Aroon Oscillator forex strategy for beginners is a simple trend-following strategy that tries to define the strength of a trend that is in focus and its likelihood to last.

The strategy combines the Aroon_Oscillator_v1 custom indicator and the ASCTrend.ex4 indicator as well.

Chart Setup

MetaTrader4 Indicators: Aroon_Oscillator_v1.ex4 (default setting), ASCTrend.ex4 (default setting)

Preferred Time Frame(s): 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: Any

Currency Pairs: (USD/CHF, EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD, EUR/CHF, GBP/CHF)

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following conditions are in place:

  1. If the aqua colored upward pointing arrow of the ASCTrend.ex4 custom indicator appears beneath price bars, it is a trigger to buy i.e. a bullish trend.
  2. If the green line of the Aroon_Oscillator_v1.ex4 custom indicator breaks above the 0.00 level, it is a signal that price is being pushed upwards i.e. a buy alert. The vertical dodgerblue line that forms above the zero mark and is usually bordered by the green line of the Aroon_Oscillator_v1 indicator, is an indication of a strong bullish trend.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following chart or indicator patterns are in display:

  1. If the magenta colored downward pointing arrow of the ASCTrend.ex4 custom indicator forms above the price bars, it is indicative of an exit or take profit signal.
  2. If the green line of the Aroon_Oscillator_v1 custom indicator breaks below the 0.00 level, it is a signal that price is being pushed lower, as such an exit or take profit is appropriate.

Sell Entry Rules

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

  1. If the magenta colored downward pointing arrow of the ASCTrend.ex4 custom indicator forms above price bars, it is a trigger to go bearish on the asset.
  2. If the green line of the Aroon_Oscillator_v1 custom indicator breaks below the 0.00 level, it is a trigger to go bearish i.e. a sell order. The Aroon_Oscillator_v1 custom indicator further forms red vertical bars (below the 0.00 level) that are bordered by the green line of the Aroon_Oscillator_v1 indicator, which goes on to support the bearish trend.

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

Exit Strategy/Take Profit for Sell Entry:

Exit or take profit on position(s) if the following is observed:

  1. If the aqua colored upward pointing arrow of the ASCTrend.ex4 custom indicator forms below the price bars, it is indicative of an exit or take profit signal.
  2. If the green line of the Aroon_Oscillator_v1 custom indicator breaks above the 0.00 level, it is a signal that price is pressured higher, as such an exit or take profit is appropriate.

Fig. 1.1

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About The Trading Indicators

The Aroon_Oscillator_v1 custom indicator is built on the Aroon indicator and as such is a trend following indicator that defines the strength of a trend in focus and its likelihood to last.

It oscillates between -100 and 100, offering currency signals for all currency pairs and on all timeframes.

The ASCTrend.ex4 is a trend following indicator that uses magenta downward pointing arrows or aqua upwards pointing arrows to define sell and buy signals respectively.

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