Forex Investing Strategy
The Forex investing strategy is a unique strategy that’s used by investors and trader to determine when to buy or sell a forex pair on longer-term charts.
It is a complete trading plan that offers advantageous entry and exit signals that seeks to maximize gains from fundamental price shifts.
The strategy leverages on early market moves and gets activated by the best price movements when in agreement with its set rules.
There’s no doubt that this strategy will help traders truly eliminate losing trade setups, by achieving more winning ones.
This is largely due to the thorough testing that we’ve undergone when formulating this strategy.
MetaTrader 4 Indicators: KAMA.ex4 (Colors Width Modified; #0=2), JMA.ex4 (Colors Modified; #0=Blue, Colors Width Modified; #0=2), MACD.ex4 (Default Setting)
Preferred Time Frame(s): 4-Hour, 1-Day, 1-Week, 1-Month
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Buy Trade Example: EUR/USD (EURO / US Dollar), D1 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the red KAMA custom indicator line crosses below the blue line of the JMA forex indicator as seen on Fig. 1.0, price is said to be driven to the upside i.e. a trigger to buy the designated currency pair.
- If the silver histograms of the MACD Metatrader 4 forex indicator align above the 0.00 horizontal level as shown on Fig. 1.0, bulls power is said to be driven to the upside, therefore a buy signal will suffice.
Stop Loss for Buy Entry: Place stop loss below long-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 ongoing, the red KAMA custom indicator line intersects the blue line of the JMA forex indicator (see Fig. 1.0), it is a signal to exit or take profit at once.
- If the silver histograms of the MACD indicator readjust to go below the zero reference level while a bullish trend is on course, it is pointing to diminishing bulls power, thus an exit or take profit is duly recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the red KAMA custom indicator line crosses above the blue JMA forex indicator line as depicted on Fig. 1.1, bears are said to be driving sentiments in the market, therefore a sell alert is said to be on the horizon.
- If the silver histograms of the MACD forex indicator break and hover below the 0.00 reference level as exemplified on Fig. 1.1, the overall market sentiment is said to be bearish, as such a sell will suffice.
Stop Loss for Sell Entry: Place stop loss above long-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the red KAMA custom indicator line intersects the blue line of the JMA forex indicator (refer to Fig. 1.1) during the course of a bearish trend, it is signaling a probable end in bearish sentiments, hence an exit or take profit is duly advised.
- If the silver histograms of the MACD indicator realign above the zero horizontal level while a bearish trend is ongoing, bears power is said to be halting, thus an exit or take profit stance is highly advised.
Sell Trade Example: CAD/JPY (Canadian Dollar / Japanese Yen), D1 Chart
About The Forex Technical Indicators Used
The Kaufman’s Adaptive Moving Average (KAMA) indicator for MetaTrader 4 was developed by Perry Kaufman, to account for noise and volatility in the market.
Kama will carefully align with prices even when price swings are somewhat small and the noise is low.
The KAMA indicator can be used to determine time turning points, spot overall trend and filter price movements.
The Jurik Moving Average (JMA) has an improved timing and smoothness, while tracking the chart’s quick up/down gapping action.
The Moving average convergence divergence (MACD) is a trend-following momentum indicator that reveals the connection between two moving averages of price.
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