The AUD/CAD 1-Hour Forex swing trading strategy is designed for traders who like to trade of the higher time frames (M30, H1, H4, D1).
It was successfully tested on the AUD/CAD pair but should work on any other pair as well.
The strategy deploys an easy Envelopes indicator signal system, simple chart demonstration and a smooth entry/exit criteria.
The strategy is ideal for market enthusiasts who’re unable to stay glued to their monitor during trading hours.
The 1-Hour strategy tries to identify medium-term market swings and will only initiate buy/sell triggers when there seems to be a high likelihood of success.
MetaTrader 4 Indicators: Envelopes.ex4 (Parameters Modified; Period=7, Colors Modified; Lower Band=None), ChandelierExit.ex4 (Default Setting), DMX.ex4 (Inputs Variable Modified; WeightDM=10.0, WeightDI=8.0)
Preferred Time Frame(s): 30-Minute, 1-Hour, 4-Hour, 1-Day
Recommended Trading Sessions: Any
Currency Pairs: AUD/CAD + any other pair
Buy Trade Example: AUD/CAD (Australian Dollar / Canadian Dollar), H1 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the orange line of the ChandelierExit custom indicator aligns somewhat below the blue line of the Envelopes Metatrader 4 forex indicator as shown on Fig. 1.0, the overall market sentiment is said to be bullish, thus a trigger to buy the designated currency pair.
- If the aqua line plus lime histograms of the DMX custom indicator break and hover above the 0.00 horizontal level as seen on Fig. 1.0, bulls are said to be pushing price higher, as such a buy alert will suffice.
Stop Loss for Buy Entry: Place stop loss below medium-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a bullish trend is on course, the orange line of the ChandelierExit forex indicator intersects the blue line of the Envelopes indicator, more and more bulls are said to be closing their positions, hence an exit or take profit stance is advised.
- If the aqua line of the DMX indicator falls below the zero horizontal reference level during the course of a bullish trend (refer to Fig. 1.0), it is a trigger to exit or take profit at once.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the magenta line of the ChandelierExit custom indicator runs fairly above the blue line of the Envelopes forex indicator as illustrated on Fig. 1.1, the general market sentiment is said to be bearish, therefore a signal to sell the currency pair of interest.
- If the aqua line plus red histograms of the DMX custom indicator break and hover below the 0.00 reference level as depicted on Fig. 1.1, bears are said to be dragging price lower, hence a sell alert will do.
Stop Loss for Sell Entry: Place stop loss above medium-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the magenta line of the ChandelierExit forex indicator intersects the blue line of the Envelopes indicator while a bearish trend is ongoing, bears are said to be closing their orders increasingly, as such a trigger to exit or take profit immediately.
- If the aqua line of the DMX indicator surges above the zero horizontal signal level while a bearish trend is on course (see Fig. 1.1), a bullish reversal is said to be imminent, as such a trigger to exit or take profit straightaway.
Sell Trade Example: AUD/CAD (Australian Dollar / Canadian Dollar), H1 Chart
About The Forex Technical Indicators Used
The Envelopes forex indicator is a technical tool that tries to spot the upper and lower bands of a trading range.
The ChandelierExit was created by Charles Le Beau and was originally featured in Alexander Elder’s books, the Chandelier Exit.
It is broadly used for setting stop-losses during a trend, however, the ChandelierExit can also be used as a trend tool.
The DMX indicator is built on the smooth, low-lag, bipolar version of DMI MT4 indicator and offers less noise, coupled with better timing when delivering signals.
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