Simplicity is one word that traders ignore a whole lot of time as they advance their trading knowledge.
However, if things are kept simple it just might prove profitable in the long run.
The Volty Channel forex trading strategy is as simple as any system can get.
It incorporates the VoltyChannel_Stop_v2.1M and Exponential Moving Average (14) MT4 indicator in delivering signals on the trading chart.
MetaTrader4 Indicators: VoltyChannel_Stop_v2.1M.ex4 (default setting), 14 period Exponential Moving Average.ex4 (14)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours
Recommended Trading Sessions: All
Currency Pairs: Majors, Crosses, Gold, Silver, Oil
Buy Example (click the image for full size):
Long Entry Rules
The following chart or indicator patterns will indicate our entry pattern for long position(s):
- If the VoltyChannel custom indicator forms a blue line below the price bars, it indicates buy signal for the underlying asset. The VoltyChannel starts off as a dot before continuing as a line indicator i.e. a blue dot, after which it continues as a blue line (refer to Fig. 1.0).
- If a bullish candle opens and closes above the Exponential Moving Average (14) line, it signals a bullish signal.
Combine both conditions and you’re in for bulls market.
Stop Loss for Long Entry: Place stop loss ≥5-15 pips away from entry price, plus trailing stop in place.
Exit Strategy/Take Profit for Long Entry
Initiate an exit or a take profit if the following conditions are met:
- If a red dot of the VoltyChannel indicator forms above the candlesticks, it indicates a reversal and as such an exit or take profit trigger is most appropriate at this point.
- If a candle closes below the Exponential Moving Average (14) line, you should consider exiting or taking your greens from your position(s).
Sell Entry Rules
The following chart or indicator patterns are indicative of a sell order:
- If the VoltyChannel custom indicator forms a red line above the price bars, it denotes price pressures to the downside i.e. bears market.
- A bearish candle should open and close below the red colored Exponential Moving Average (14) line, a sign that the bears are winning and a sell is in order.
Stop Loss for Sell Entry: Place stop loss ≥5-15 pips above from entry price, plus trailing stop in place.
Exit Strategy/Take Profit for Sell Entry
Take note of the following chart or indicator patterns before triggering an exit or a take profit:
- If a blue dot of the VoltyChannel indicator forms below the candlesticks, it explains price reversal.
- If a bullish candle closes above the Exponential Moving Average (14) line, it signals weakness in the existing bearish trend, offering an exit or take profit trigger.
About The Trading Indicators
The VoltyChannel_Stop_v2.1M custom indicator is built on the Moving Average and the Average True Range (10) also known as the ATR MT4 indicators. This blend means this indicator is a perfect companion for a scalping strategy.
The Exponential Moving Average (14) is designed to offer weight to the most recent data, thus its wide use as a trend indicator.