This System forex strategy was designed to trade on the 4-hour time-frames.
- Recommended Forex Broker who support MetaTrader 4 terminal.
Used forex indicators and tools:
- MACD (8, 17, 9);
- Stochastic ( 8,3,3 ), add levels of 76.4 and 23.6;
- Tom DeMark trendline (Tom Demark Trend Line indicator) - he comes to better identify the current trend in the market.
- Levels and Fibonacci extension , namely SC Fibonacci ( Fibonacci super -cluster ). SC Fibonacci - is a strong level of support or resistance for the market prices , which were formed on the basis of 2- Fibonacci retracement levels of 38.2 and 61.8 ( when these levels are close or coincide ). This area is very strong support zone (if it is below the price - to buy ) or resistance (if it is higher prices - for transactions on sale ).
To determine the goals to close the deal (take profits), this strategy uses Fibonacci extension of 61.8 %, 100 % or 161.8 %.
BUY POSITION
- In the presence of an uptrend in the market to start looking at the Stochastic Oscillator on the 4-hour chart , and determine the situation on the oversold currency pairs, while considering all the pairs for which you accept a trade.
2-3. Once we found a suitable situation to us - Stochastic Oscillator is oversold in its area , looking for confirmation on the MACD indicator on D1 and H1 charts ( they have to show these interval the same type of signals). If the D1 chart we can see the difference signal for MACD indicator , the trade deals are not going to enter .The angle indicator moving average of the MACD indicator of 45 degrees , or nearly parallel to the moving averages, they are an extremely good sign for transactions .
If the MACD indicator line on the D1 chart are located nearby , or intersect , then we must have a super- cluster of Fibonacci (SC) 38.2% and 61.8 %, Trend Line , and about the price.
If on the H4 chart Stochastic Oscillator only 50-60% is oversold , the trade position can not be opened because the market can still much deeper pullback against our trading position.
4. Also, we need to get confirmation of D1 ( day ) Trend Line, if it supports the price on the chart in an uptrend . In the case of a breakdown of the day Trend Line, it must be kept super- cluster of Fibonacci (SC) or trading levels Fibo 38.2%, 61.8%;
5. Then hold on Fibo retracement level on the H4 chart and determine the presence of super-cluster of Fibonacci (SC).
If the graph of the SC is not , the trade position can not be opened !
After confirming all the necessary conditions to construct a Fibonacci extension levels (Fibo) from the previous oscillatory minimum to the maximum current on the chart , and then to the current minimum to get the Fibonacci extension levels Fibo 61.8% to our target price.
6. Before you open a trading position , place a stop -loss at the current minimum , or as close to the level of Fibo 61.8%.
7. And then identify the target for the level of expansion Fibo 61.8%.
Remember:
- To open a transaction for the purchase , the price should not be below the level of Fibo 61.8%;
- You should not risk more than 3-5% (maximum of 7-8% - in the ideal case and in the presence of an existing backlog of profit on the deposit ) for each open trade balance of your transaction at the time of the transaction.
FOR TRANSACTION ON SELL USING THE OPPOSITE RULE.
ADITIONAL terms of closing the deal ( if it is not closed by TP or stop-loss ):
- If on the H4 chart Stochastic Oscillator moved to overbought zone (for a long trading position ) , the transaction closes at the market price;
- And also , if the MACD crossing the middle on H1 or D1 chart;
- The position also should be closed in case of breakdown of Tom DeMark trendline;
- If, after 8-16 hours after the opening of the stop- loss or profit - just to be close;
- Closing the trading position , if the goal is almost reached, but the price does not go further , or if you are satisfied with the result of an open transaction and believe that the position should be closed as well;
- Well, if you see fit , you can close a trading position on the eve of the approaching weekend , or an important celebration of one of the countries of the currency pair that you have opened a transaction.
NOTE: For a stable operation of forex strategy doesn't recommend the risk more than 2-5% of each transaction, according to the rules of Forex Money Management!
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