The Forex Octavia strategy is made up of a few basic trend-following rules which when adhered to will offer traders good buy and sell trade opportunities on any pair throughout all trading sessions.
We will be using the popular Mega trend forex indicator for trend direction purposes.
New comers as well as experienced traders will find this strategy sufficient to meet their financial goals.
The trade setup offers us a good opportunity to buy or sell when the defined trading rules popup on our trading chart.
Our profit targets are dynamic and in line with the changing market conditions.
This means that there’s a likelihood to always leave the market with varying profit take-home.
Two trades that were generated by this system are depicted on the charts below.
MetaTrader 4 Indicators: Median.ex4 (Colors Modified; #0=None, #1=None, Colors Width Modified; #2=2, #3=2), Mega trend.ex4 (Colors Modified; #1=Magenta), MACD.ex4 (Parameters Modified; Fast EMA=17, Slow EMA=31, MACD SMA=14)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day, 1-Week, 1-Month
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Buy Trade Example: AUD/NZD (Australian Dollar / New Zealand Dollar), M5 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the dual colored (magenta & blue) line of the Mega trend custom indicator crosses below the lines (yellow & red) of the Median indicator in a bottom up fashion as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish, thus a trigger to go long on the designated forex pair.
- If the silver histograms of the MACD Metatrader 4 forex indicator align somewhat above the zero reference level as depicted on Fig. 1.0, price is said to be driven to the upside, as such a buy alert will suffice.
Stop Loss for Buy Entry: Place stop loss below the blue Mega trend indicator line.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If the dual colored (magenta & blue) line of the Mega trend indicator intercepts the yellow line of the Median indicator during the course of a bullish trend (see Fig. 1.0), it is a signal to exit or take profit immediately.
- If the silver histogram of the MACD indicator realigns below the zero horizontal level while a bullish trend is running, bulls power is said to be halting, as such an exit or take profit stance is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the dual colored (magenta & blue) line of the Mega trend custom indicator crosses above the lines (yellow & red) of the Median indicator in a top downward manner as seen on Fig. 1.1, the general market sentiment is said to be bearish, thus a signal to sell the selected currency pair.
- If the silver histograms of the MACD indicator align slightly below the zero reference level as exemplified on Fig. 1.1, price is said to be dragged lower, thus a trigger to go short on the currency pair of interest.
Stop Loss for Sell Entry: Place stop loss above the magenta Mega trend indicator line.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the dual colored (magenta & blue) line of the Mega trend indicator intercepts the red line of the Median indicator while a bearish trend is ongoing (refer to Fig. 1.1), it is a signal to exit or take profit straightaway.
- If the silver histogram of the MACD indicator realigns above the zero horizontal level while a bearish trend is on course, bears power is said to be weaning, as such an exit or take profit stance is advised.
Sell Trade Example: AUD/NZD (Australian Dollar / New Zealand Dollar), M5 Chart
About The Forex Technical Indicators Used
The Median custom indicator forms a channel with two middle lines and is simply used to gauge volatility in the activity.
The Mega trend indicator is an enhanced Hull Moving Average indicator set to a default period of 144.
It does attempt to eliminate lag altogether, while also enhancing smoothing.
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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