Forex Chart Strategy For Metatrader 5

The Forex Chart Strategy for Metatrader 5 offers accurate buy and sell trading signals based on the Ichimoku Kinko Hyo technical indicator.

It’s a highly visible trend following trading strategy that works for any kind of trader, style and pair.

  • For scalping purposes, use on the M1 and M5 chart
  • For day trading purposes, use on the M5, M15 and M30 chart
  • For swing trading purposes, use on the H1, H4 and D1 chart

The MT5 forex chart strategy is simply a cutting-edge trading method in which trends can be better and more accurately predicted for better performance.

Trade Setup  

MetaTrader 5 Indicators: Ichimoku Kinko Hyo.ex5 (Colors Modified; Chikou Span=None, Up Kumo=None, Down Kumo=None), Average penetration bars.ex5 [Inputs Variable Modified; Look-back period=24, Average period=36, Histogram type=Classical (higher/lower value) comparison]

Trade Style: Scalping, day trading, swing trading

Trading Sessions: London | New York | Tokyo

Currency Pairs: Majors, cross pairs, exotics

Platform: Metatrader 5 (MT5)

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Buy Trade Example: EURJPY, H1 Chart

Fig. 1.0

Trading Strategy Rules For Buy and Sell Trades Explained

Buy Entry

Enter a buy trade if the following trading conditions are met:

  1. If the blue line of the Ichimoku Kinko Hyo Metatrader 5 forex indicator crosses below the red line as shown on Fig. 1.0, price is said to be driven higher i.e. a trigger to go long on the stipulated forex pair.
  2. If the deep sky blue bars of the Average penetration bars custom indicator pops up within the activity chart as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish, therefore a buy signal is highly recommended.

Suggested Stop Loss for Buy Entry: Place stop loss 3 pips below the most recent support low.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions are met:

  1. If while a bullish trend is running, the blue line of the Ichimoku Kinko Hyo indicator intersects its red line (see Fig. 1.0), more and more bulls are said to be exiting the market, as such an exit or take profit stance is advised.
  2. If the Average penetration bars forex indicator displays a sandy brown bar during the course of a bullish signal, it is pointing to diminishing bulls power, hence an exit or take profit will suffice.

Sell Entry

Open a sell trade if the following trading conditions are met:

  1. If the blue line of the Ichimoku Kinko Hyo forex indicator crosses above the red line as exemplified on Fig. 1.1, more bears are said to be entering the market i.e. an alert to sell the currency pair of focus.
  2. If the sandy brown bars of the Average penetration bars custom indicator pops up within the activity chart as seen on Fig. 1.1, the general market sentiment is said to be bearish i.e. a signal to sell the currency pair of interest.

Suggested Stop Loss for Sell Entry: Place stop loss 3 pips above the most recent resistance high.

Suggested Exit Strategy/Take Profit for Sell Entry

Exit the sell trade if the following trading conditions are met:

  1. If while a bearish trend is ongoing, the blue line of the Ichimoku Kinko Hyo intersects its red line (refer to Fig. 1.1), it is pointing to diminishing bears strength, as such an exit or take profit stance will suffice.
  2. If the Average penetration bars forex indicator displays a deep sky blue bar while a bearish signal is running, it is signaling halting bears power, hence an exit or take profit will do.

Sell Trade Example: EURJPY, H1 Chart

Fig. 1.1

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MT5 Trading Indicators Used For This Strategy

The Ichimoku Kinko Hyo indicator is an appropriate technical tool, particularly for newbies who want to understand trend momentum, direction, pinpointing reversals and locating entry levels.

The Average penetration bars is a technical indicator that was first introduced in the June 2018 edition of Technical Analysis of Stocks and Commodities magazine, by Markos Katsanos.

It is simply a trend indicator that uses various averaging methods.

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