Forex Algorithm Strategy

The Forex Algorithm strategy simply follows market trends with buy or sell triggers generated in accordance with pre-configured buy/sell conditions that are fulfilled by some of the best forex technical indicators.

The role of this strategy is to offer a connection between the trader and the market in a manner that ensures longer-term profitability.

Let’s move onto the examples attached to see how traders can best apply this strategy.

Chart Setup

MetaTrader4 Indicators: buyers-vs-sellers.ex4 (Inputs Variable Modified; BvsPeriod=27, Colors Width Modified; #0=2, #1=2), ichimoku-average-indicator.ex4 (Default Setting)

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 the lime vertical bars of the buyers-vs-sellers Metatrader 4 forex indicator stay aligned within the indicator window as shown on Fig. 1.0, price is said to be pushed to the upside i.e. a trigger to go long on the selected currency pair.
  2. If the sandy brown cloud of the ichimoku-average-indicator stay somewhat below the candlesticks as depicted on Fig. 1.0, the general market sentiment is said to be bullish, therefore a buy trigger will suffice.

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 the buyers-vs-sellers custom indicator pops up a red vertical bar within its indicator window during the course of a bullish trend (see Fig. 1.0), it is signaling a probable end to its current trend, therefore an exit or take profit is recommended.
  2. If the sandy brown cloud of the ichimoku-average-indicator reverts to thistle colored cloud while a bullish trend is ongoing, a likely bearish reversal is said to be underway, therefore an exit or take profit is advised.

Sell Entry Rules

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

  1. If the red vertical bars of the buyers-vs-sellers custom indicator stay positioned within the indicator window as illustrated on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the currency pair of interest.
  2. If the thistle cloud of the ichimoku-average-indicator stay slightly above the candlesticks as exemplified on Fig. 1.1, the overall market sentiment is said to be bearish, therefore a sell trigger will do.

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 the buyers-vs-sellers custom indicator pops up a lime vertical bar within its indicator window during the course of a bearish trend (refer to Fig. 1.1), it is signaling a likely end to its current trend, therefore an exit or take profit is recommended.
  2. If the thistle cloud of the ichimoku-average-indicator reverts to sandy brown colored cloud while a bearish trend is running, a bullish reversal is said to be looming, thus a trigger to exit or take profit immediately.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The buyers-vs-sellers indicator is used to literally gauge buyers versus sellers in the market.

It is a good pointer as to where the future price is heading (up or down).

The ichimoku-average-indicator is an Ichimoku indicator that is comprised of a moving average as a substitute for the middle price channel (Donchian Channel).

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