QQE Envelopes Forex Trading Strategy
The QQE Envelopes forex trading strategy can be deployed as a scalping strategy.
It is effective in offering multiple trading signals during the day’s session.
As a scalping strategy, buy and sell ideas are frequently processed taking cognizance of this trading system.
MetaTrader4 Indicators: RainbowMMA_06.ex4 (width & color modified), Envelopes.ex4 (width & color modified), QQE.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours
Recommended Trading Sessions: All
Currency Pairs: any
Buy Example (click the image for full size):
Long Entry Rules
The following conditions or rules define a long entry:
- If price bars bounces off the black colored lower Envelope line on its way upward and breaches the RainbowMMA_06 custom indicator, with a bullish candle opening and closing above the RainbowMMA_06 custom indicator lines, this is an indication that sentiment favors bullish trend.
- If the blue line of the QQE custom indicator crosses the 50 level upward, it is an indication that price is pushing its way upward and as such a bullish trend is on course.
Stop Loss for Long Entry: Place stop loss ≥3-15 pips away from entry price.
Exit Strategy/Take Profit for Long Entry
Watch out for the following conditions or rules are pointers to an exit or take profit strategy:
- If price bars touches the green colored upper Envelope custom indicator, an exit or take profit is advised.
- If the blue line of the QQE custom indicator cuts the 50 mark downward, this signals a reversal and as such an exit or take profit should be triggered.
Sell Entry Rules
The following conditions are needed to be in place before initiating a sell order:
- If price bars bounces off the green colored upper Envelope line on its way downward and breaches the RainbowMMA_06 custom indicator lines, with a bearish candle opening and closing below the RainbowMMA_06 custom indicator lines, this is a pointer that price is heading southward.
- If the blue line of the QQE custom indicator crosses the 50 level downward, it is an indication that price is pushing its way downward, getting us set for a bearish trend..
Stop Loss for Sell Entry: Place stop loss ≥3-15 pips above from entry price.
Exit Strategy/Take Profit for Sell Entry
The following chart/indicator pattern will clearly define our exit or take profit rule:
- If price or candlestick hits or touches the black colored lower Envelope, it is indicative of an exit or take profit for the position(s) entered.
- Watch out the blue line of the QQE custom indicator, if the line dips below the 50 level as seen in the indicator window (refer to Fig. 1.1), we’re advised to exit or take profit on position(s).
About The Trading Indicators
The RainbowMMA_06.ex4 custom indicator is the sixth GMMA forex indicator in a series of eleven indicators that are put together on the Guppy Multi Moving Average. The RainbowMMA_06 is made up of EMA (23), EMA (21), EMA (17), EMA (15) and EMA (14).
Envelopes on the other hand is built on moving averages and is also termed the Moving Average Envelopes. The indicator has the moving average set to 20 periods, while the upper and lower Envelopes are set to 0.10% deviation. The indicator can be tweaked to find the most desirable setting.
The QQE MT4 custom indicator uses three lines that oscillates around the central 50.00 level in defining overbought and oversold levels for an asset. In our case we measured buy and sell signal by referencing the line of the QQE and its orientation above or below the 50.00 level respectively.