Channel Trader Forex Strategy

The Channel Trader Forex strategy can be a massive difference maker in your trading arsenal.

The strategy aims at taking advantage of price movement that seeks to move away from usual price action.

When I say “usual” I am referring to channel price patterns.

One smart way of making more pips is to adopt this smart approach.

I will teach you how to implement this strategy in your every day trading activities.

The good news about channel trading is that majority of the financial markets, as well as instruments trade within a price channel around 20% – 25% of the time.

Let’s get started:

Chart Setup

MetaTrader4 Indicators: auto-channel-indicator.ex4 (Inputs Variable Modified; AllBars=240000000, BarsForFract=8), watr.ex4 (Default Setting), vq-bars.ex4 (Inputs Variable Modified; Length=15, Method=6)

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 price bars opens and closes above the middle dotted lime line of the auto-channel-indicator as shown on Fig. 1.0, price is said to be pushed to the upside, therefore a buy order will suffice.
  2. If the watr Metatrader 4 forex indicator displays a coral line that’s aligned below the candlesticks as illustrated on Fig. 1.0, price is said to be pressured higher i.e. a trigger to go long on the designated currency pair.
  3. If the vq-bars custom indicator displays green bars within the activity chart as shown on Fig. 1.0, bulls are said to be driving price higher, as such a buy alert will do.

Stop Loss for Buy Entry: Place stop loss below the most recent swing low price.

Exit Strategy/Take Profit for Buy Entry

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

  1. If price closes below the middle lime dotted line of the auto-channel-indicator while a bullish trend is ongoing, bulls power is said to be weaning i.e. a trigger to exit or take profit immediately.
  2. If the watr indicator displays a dodger blue line that stays above the candlesticks during a bullish signal, it is indicative of a bearish reversal, therefore an exit or take profit is recommended.
  3. If the vq-bars indicator forms a red bar during the course of a buy alert, more bulls are said to be closing their orders, thus an exit or take profit is duly advised.

Sell Entry Rules

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

  1. If price bars opens and closes below the middle dotted lime line of the auto-channel-indicator as illustrated on Fig. 1.1, price is said to be driven lower, therefore a sell order will do.
  2. If the watr Metatrader 4 forex indicator puts up a dodger blue line that’s positioned above the candlesticks as depicted on Fig. 1.1, price is said to be pushed to the downside i.e. a trigger to go short on the selected forex pair.
  3. If the vq-bars custom indicator displays red bars within the activity chart as exemplified on Fig. 1.1, overall market bearish sentiment is said to be halting, as such a sell signal is appropriate.

Stop Loss for Sell Entry: Place stop loss above the most recent swing high price.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If price closes above the middle lime dotted line of the auto-channel-indicator while a bearish trend is running, a bullish reversal is said to be looming, therefore an exit or take profit is rightly recommended.
  2. If the watr indicator displays a coral line that stays below the candlesticks during a bearish trend, a bullish reversal is said to be on the horizon, therefore an exit or take profit is advised.
  3. If the vq-bars indicator forms a green bar while a bearish trend is on course (refer to Fig. 1.0), more bears are said to be exiting their positions, thus a trigger to exit or take profit forthwith.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The auto-channel-indicator.ex4 is a technical indicator that forms a channel around the actual price, allowing traders determine breakout points quite easily.

The watr.ex4 Metatrader 4 forex indicator is a simple trend indicator that clearly paints the direction of the current trend.

The watr indicator is an offshoot of the Average True Range indicator.

The vq-bars.ex4 Metatrader 4 forex indicator is built on moving averages.

It is an indicator that helps gauge trend direction and possible trend reversals.

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