Forex Strategy For Newbies That Works
Newbies are always faced with a daunting challenge of not knowing the basic strategies to deploy when trading currencies.
Having zero guidance in the currency market can be worrisome for beginners, and this can lead to a disastrous forex trading career.
Taking this sort of route in your online trading career can be likened to walking blindfolded into the woods.
You sure don’t know what to expect.
The Forex Strategy For Newbies that works is designed to be simple and profitable enough to avoid putting off the newcomers.
It is built around the popular trend-following Alligator technical indicator.
This strategy can be applied to all currency pairs available in the market and works for scalping, day trading and swing trading.
MetaTrader 4 Indicators: Alligator.ex4 (Parameters Modified; Jaws period=18, Teeth period=13, Lips period=10), MACD_Cross.ex4 (Inputs Variable Modified; fast_ema_signal=15, slow_ema_signal=45, signal_period=40, Colors Width Modified; #0=4, #1=4)
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: USD/CAD (US Dollar / Canadian Dollar), H1 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 the lime and red lines in a bottom up manner as shown on Fig. 1.0, price is said to be driven to the upside i.e. a signal to buy the designated currency pair.
- If the blue signal ball of the MACD_Cross custom indicator pops up somewhat below the price bars as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish, thus a trigger to buy the currency pair of interest.
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 forex indicator intersects the lime line during the course of a bullish signal, it is pointing to diminishing bulls power, as such an exit or take profit stance is apt.
- If the MACD_Cross custom indicator pops up a red signal ball above the candlesticks as depicted on Fig. 1.0, bulls are said to be losing steam, hence an exit or take profit will suffice.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the Alligator forex indicator crosses the lime and red lines in a top downward fashion (see Fig. 1.1), price is said to be dragged lower, and therefore a sell alert is apt.
- If the red signal ball of the MACD_Cross custom indicator pops up slightly above the candlestick as exemplified on Fig. 1.1, the general market sentiment is said to be bearish, as such 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 forex indicator intersects the lime line while a bearish trend is on course, it is signaling weaning bears power, as such an exit or take profit stance is duly advised.
- If the MACD_Cross custom indicator pops up a blue signal ball below the price bars as shown on Fig. 1.1, bears are said to be leaving the market in their droves, hence an exit or take profit will do.
Sell Trade Example: USD/CAD (US Dollar / Canadian Dollar), H1 Chart
About The Forex Technical Indicators Used
The Alligator is a technical indicator developed by Bill Williams 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 possible direction.
The MACD_Cross custom indicator is a modified Moving Average Convergence/Divergence oscillator that offers the best of both momentum and trend following, by deploying the signal line crossovers.
Start using this forex strategy in just 5 minutes. Click here to get started now.