Simple Zone Forex Trading Strategy

The simple Zone forex strategy is a mechanical trading system that deploys two technical analysis FX indicators in issuing out buy/sell forex trading signals.

Just about any trader can utilize this trading strategy considering its simplicity.

Chart Setup

MetaTrader4 Indicators: dsl_-_rsi.ex4 (default setting), Vidya_zone.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hour

Recommended Trading Sessions: All sessions

Currency Pairs: Preferred majors and cross currency pairs

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy position if the following conditions or rules are visible on the activity chart:

  1. If price opens and closes above the Vidya_zone.ex4 custom indicator as shown on Fig. 1.0, price is said to be pushed higher i.e. a buy signal. It is noteworthy to state here that in most cases price is seen hovering above the “deep sky blue” line of the Vidya_zone.ex4 custom indicator, an indication that it is a strong bullish trend.
  2. If the lime green line of the dsl_-_rsi.ex4 custom indicator forms above its upper dotted line as depicted on Fig. 1.0, it is a sign that price is being pressured higher i.e. a buy alert.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following indicator or chart patterns get displayed:

  1. If price closes below the dark orange line of the Vidya_zone.ex4 custom indicator as shown on Fig. 1.0, it is a reversal signal and traders are advised to exit or take profit without delay.
  2. If the line of the dsl_-_rsi.ex4 custom indicator declines lower to break its lower dotted line, this is a signal that price is reversing from its earlier bullish trend, an exit or take profit is strongly recommended.

Sell Entry Rules

Enter a sell in the market if the following rules or conditions hold sway in the market:

  1. If price opens and closes below the Vidya_zone.ex4 custom indicator as shown on Fig. 1.1, price is said to be pressured lower i.e. a sell signal. In most cases price is somewhat hovering below the dark orange line of the Vidya_zone.ex4 custom indicator, an indication that a strong bearish trend is ongoing.
  2. If the orange line of the dsl_-_rsi.ex4 custom indicator forms below its lower dotted line as depicted on Fig. 1.1, it is a sign that price is being pressured lower i.e. a sell alert.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following indicator or chart pattern gets displayed:

  1. If price closes above the “deep sky blue” line of the Vidya_zone.ex4 custom indicator as shown on Fig. 1.1, it is a reversal signal and traders are advised to exit or take profit straight away.
  2. If the line of the dsl_-_rsi.ex4 custom indicator rises higher to break its upper dotted line, this is a signal that price is reversing from its earlier bearish trend, an exit or take profit is strongly recommended.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Vidya_zone.ex4 or Variable Index Dynamic Average Zone indicator uses the high, low and median prices for its calculation. The indicator relies on exponential smoothing as a foundation for changes in the rate trend.

The dsl_-_rsi.ex4 custom indicator on the other hand combines levels and signal line in defining overbought (sell signal) and oversold (buy signal) levels in the market.

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