AUD/CAD Forex Day Trading Strategy

The AUD/CAD Forex day trading strategy is a versatile trading system that works great for day trading purposes on the 5-Minute, 15-Minute, 30-Minute and 1-Hour charts.

The strategy enables traders to closely monitor momentum in the market to generate high probability buy/sell trade alerts.

The added technical indicators are able to gauge volatility correctly and then blend that information along with trend capabilities of price and its accompanying momentum.

The strategy has been tested thoroughly on the AUD/CAD pair but should be working on all other pairs too.

Chart Setup

MetaTrader 4 Indicators: Bollinger Bands.ex4 (Default Settings), ExponentialMovingAveragesSignals.ex4 (Inputs Variable Modified; FasterEMA=25, SlowerEMA=30), coppock.ex4 (Inputs Variable Modified; RPeriod1=36, colors Width Modified; #0=2)

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

Recommended Trading Sessions: London, New York, Tokyo

Currency Pairs: AUD/CAD + any other pair

Download

Download the AUD/CAD Forex Day Trading Strategy

Buy Trade Example: AUD/CAD (Australian Dollar / Canadian Dollar), M15 Chart

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

  • If the green upward pointing arrow of the ExponentialMovingAveragesSignals custom indicator stays somewhat below the price bars as seen on Fig. 1.0, bulls are said to be driving price higher i.e. a trigger to go long on the selected currency pair.
  • If price opens, closes and runs above the middle line of the Bollinger Bands Metatrader 4 forex indicator as shown on Fig. 1.0, the overall market sentiment is said to be bullish, thus a signal to buy the selected forex pair.
  • If the red histograms of the coppock indicator stay above the 0.00 horizontal level as illustrated on Fig. 1.0, bulls are said to be driving price higher, therefore a buy alert will suffice.

Stop Loss for Buy Entry: Place stop loss below the previous swing low.

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 ongoing, the ExponentialMovingAveragesSignals custom indicator displays a red downward pointing arrow, a bearish reversal is said to be looming, hence an exit or take profit stance is recommended.
  • If price opens and closes below the middle line of the Bollinger Bands indicator during the course of the bullish trend (see Fig. 1.0), more and more bulls are said to be closing their positions, thus a trigger to exit or take profit.
  • If the coppock indicator displays a red histogram below the 0.00 reference level while a bullish trend is running, bulls power is said to be diminishing, as such an exit or take profit stance is advised.

Sell Entry Rules

Enter a sell order if the following holds true:

  • If the red downward pointing arrow of the ExponentialMovingAveragesSignals custom indicator stays slightly above the price bars as depicted on Fig. 1.1, bears are said to be driving price lower i.e. a trigger to go short on the currency pair of focus.
  • If price opens, closes and runs below the middle line of the Bollinger Bands forex indicator as exemplified on Fig. 1.1, the general market sentiment is said to be bearish, as such a sell alert is imminent.
  • If the red histograms of the coppock indicator align below the 0.00 reference level as demonstrated on Fig. 1.1, bulls are said to be driving price lower, therefore a sell alert will do.

Stop Loss for Sell Entry: Place stop loss above the previous swing high.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  • If while a bearish trend is running, the ExponentialMovingAveragesSignals custom indicator pops up a green upward pointing arrow, a bullish reversal is said to be on the horizon, hence a trigger to exit or take profit forthwith.
  • If price opens and closes above the middle line of the Bollinger Bands indicator while a bearish trend is on course (refer to Fig. 1.1), bears are said to be closing their orders increasingly, thus a signal to exit or take profit.
  • If the red histogram of the coppock indicator readjust to stay above the 0.00 reference level while a bearish trend is ongoing, bears power is said to be halting, as such an exit or take profit stance is apt.

Sell Trade Example: AUD/CAD (Australian Dollar / Canadian Dollar), M15 Chart

Fig. 1.1

Free Download

Download the AUD/CAD Forex Day Trading Strategy

About The Forex Technical Indicators Used

The Bollinger Bands is a tool that gauges volatility in the forex market, alongside other vital information like sessions of market consolidation, direction of trend, possible tops and bottoms along with price targets.

The Bollinger Bands are actually plotted two standard deviations away from a simple moving average.

The ExponentialMovingAveragesSignals is a custom indicator that applies a faster and slower EMA crossover when defining market trend.

The Coppock custom indicator is a technical study that is built on three different Moving Averages i.e. Exponential, Linear Weighted, and the Simple Moving Averages.

Easy Installation

Start using this forex strategy in just 5 minutes. Click here to get started now.

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