Strong Trend Oscillator Forex Trading Strategy

The Strong Trend Oscillator Forex trading strategy looks at the strength behind the price move instead of price alone to determine whether momentum is building up or exhaustive.

It’s a trend following strategy that performs well with the help of a buy/sell forex indicator.

A lot of traders have learned that when strength is building up and there’s a buy/sell signal, often, it’s a good idea to open a new trade position in the direction of the prevailing trend.

Let’s get started:

Chart Setup

MetaTrader4 Indicators: cauchy_derivative.ex4 (Inputs Variable Modified; period=50), super-arrow-indicator.ex4 (Inputs Variable Modified; FasterMovingAverage=14, SlowerMovingAverage=24, RSIPeriod=24), stealth-oscillator.ex4 (Inputs Variable Modified; SMAPeriod=36, LSMAPeriod=36)

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

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If the dark violet line of the cauchy_derivative Metatrader 4 forex indicator breaks off (up/down) the 0.00 horizontal line as shown on Fig. 1.0, it is a signal that momentum is building, therefore expect price to either go up or down.
  2. If the lime upward pointing arrow of the super-arrow-indicator gets aligned fairly below the candlesticks as depicted on Fig. 1.0, price is said to be pushed higher i.e. a trigger to go long on the designated forex pair.
  3. If the lime horizontal bar of the stealth-oscillator custom indicator pops up within the indicator window as seen on Fig. 1.0, the overall market sentiment is said to be bullish, as such a buy order will suffice.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If the dark violet line of the cauchy_derivative custom indicator runs along the 0.00 alert level, it is suggestive of price exhaustion, but does not necessarily prompt us to exit or take profit, rather traders should remain cautious.
  2. If the red downward pointing arrow of the super-arrow-indicator pops up during a bullish signal (see Fig. 1.0), bullish sentiment is said to be diminishing, thus an exit or take profit is recommended.
  3. If the horizontal bar of the stealth-oscillator indicator turns red during the course of a bullish trend, more bulls are said to be leaving the market, as such an exit or take profit will suffice.

Sell Entry Rules

Go short if the following setups gets displayed rightly on the activity chart:

  1. If the dark violet line of the cauchy_derivative custom indicator breaks off (up/down) the 0.00 horizontal line as exemplified on Fig. 1.1, it is a sign that momentum is building, therefore we can expect price to either rise or drop.
  2. If the red downward pointing arrow of the super-arrow-indicator gets aligned slightly above the price bars as illustrated on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the currency pair of focus.
  3. If the red horizontal bar of the stealth-oscillator custom indicator pops up within the indicator window as exemplified on Fig. 1.1, the general market sentiment is said to be bearish, as such a sell alert is imminent.

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 takes center stage:

  1. If dark violet line of the cauchy_derivative custom indicator runs along the 0.00 alert level, it is suggestive of price exhaustion, but does not necessarily prompt us to exit or take profit, instead investors should remain cautious.
  2. If the lime upward pointing arrow of the super-arrow-indicator pops up while a bearish signal is ongoing (refer to Fig. 1.1), bearish sentiment is said to be halting, thus an exit or take profit is advised.
  3. If the horizontal bar of the stealth-oscillator indicator reverts to lime during the course of a bearish trend, more bears are said to be closing their positions, as such an exit or take profit will do.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The cauchy_derivative is a custom indicator that shows the difference in the estimated values of the current bar and previous bar.

The super-arrow-indicator is a trend following technical indicator that is built on a fast & slow moving average, relative strength index, Bollinger Bands, plus a bulls/bears power indicator.

The stealth-oscillator is a Metatrader 4 forex indicator that combines the Simple Moving Average (SMA) and Least Squares Moving Average (LSMA).

The resultant indicator is an oscillator that is displayed within a separate window.

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