Forex Quant Strategy
The Quant trading system is known to capitalize on statistics, numerical analysis and computer algorithm to considerably shrink the amount of time and energy traders require to put in for researching and trading.
However, our Quant strategy does not auto trade on your behalf, instead it utilizes a pair of unique indicators, adopts a trading pattern and explores the market for matching setup rules.
The Forex Quant strategy relies on the strength of the trend when triggering buy and sell market entries.
The efficacy of the strategy is contained in the fact that it resolves to trade in the direction of the leading trend.
To better understand this system, lets explain the following under listed examples.
MetaTrader 4 Indicators: Alligator.ex4 (Parameters Modified; Jaws period=18, Teeth period=13, Lips period=10), QQE.ex4 (Inputs Variable Modified; Smoothing=10)
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/USD (Australian Dollar / US Dollar), M30 Chart
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If the blue line of the Alligator Metatrader 4 forex indicator crosses below the lime and red lines in a bottom up manner as shown on Fig. 1.0, price is said to be pressured to the upside, as such a buy alert will suffice.
- If the blue line of the QQE custom indicator breaks above the 50.00 horizontal level as seen on Fig. 1.0, the leading market trend is said to be bullish, thus a trigger to buy the designated forex pair.
Stop Loss for Buy Entry: Place stop loss below the blue Alligator signal line.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If the blue line of the Alligator indicator intersects the lime line while a bullish signal is running, bulls are said to leaving the market in their droves, as such an exit or take profit stance is duly recommended.
- If the blue line of the QQE custom indicator falls below the 50.00 reference level during the course of a bullish trend (refer to fig. 1.0), bulls power is said to be diminishing, as such an exit or take profit stance is advised.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the Alligator forex indicator crosses above the lime and red lines in a top downward fashion (see Fig. 1.1), price is said to be dragged lower, thus a trigger to sell the currency pair of interest.
- If the blue line of the QQE custom indicator breaksand runs below the 50.00 reference level as illustrated on Fig. 1.1, the predominant market trend is said to be bearish, thus a sell alert will suffice.
Stop Loss for Sell Entry: Place stop loss above the blue Alligator signal line.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the blue line of the Alligator indicator intersects the lime line during a bearish trend, bears are said to be driving sentiments, thus an exit or take profit stance is apt.
- If the blue line of the QQE custom indicator spikes above the 50.00 reference level while a bearish trend is ongoing, bears power is said to be weaning, as such an exit or take profit stance is duly recommended.
Sell Trade Example: AUD/USD (Australian Dollar / US Dollar), M30 Chart
About The Forex Technical Indicators Used
The Alligator is a technical indicator by Bill Williams, introduced in 1995.
The indicator is comprised of three lines that are overlaid on the activity chart.
The lines represent the jaw, the teeth and the lips of the Alligator.
Forex traders tend to use this indicator to gauge trend and its likely direction.
The QQE is short for Qualitative Quantitative Estimation, and represents a Metatrader 4 forex indicator that uses the smoothed Moving Average of Relative Strength Index indicator.
It is therefore an oscillator that tries to find discrepancies in which price forms a new maximum while overcoming the level of its previous maximum.
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