Every trader has a common cycle in the forex market. First you start with a demo account, buy when price goes up, sell when price goes down. Everything seems perfect in first couple of weeks. You decide to open a real account.
Meanwhile you discover that there are many indicators to tell you what to do. Your charts become full of indicators, you can barely see because there is no space left on the chart. You open a position with real money and things start to get harder. Sometimes you close trades with little profits while you could have closed it earlier and gained 150+ pips. Since you don’t have certain rules and strategy, your account starts to melt due to different market conditions.
At this point you start to search forums, web sites to tell you what to do. Finally you blow another account and blame others for their bad calls. Next you search for profitable expert advisors to run on your computer. Of course, you get the same result. Finally you decide to find a strategy that works and you learn new things as you search.
Most important thing I have learned to become a successful was being patient (waiting for the right time) and following the strategy that I am using. Of course you learn risk management as well. Ah and one more important thing; never get motioned from other trader’s calls, only trade what you triggered by yourself, it is the only way to learn mastering your system and be successful.
Well, MetaTrader is the most common program that is used by traders so I am going to explain this system on this platform. The indicators provided here work on MetaTrader 4 platform only. You have to copy indicators to “indicators” folder and template files to “template folder”. For example:
Indicators go to “C:\mt4\experts\indicators” folder and templates go to “C:\mt4\templates”.
Now I am going to explain a strategy which works well as long as you follow its rules. You can use this strategy for all major pairs. Recommended time frame is 4hours. First have a look at the chart below.
As you see we use Heiken Ashi candles. But why Heiken Ashi Candles?
There are five primary signals that identify trends and buying opportunities:
• Positive candles (green) containing no wicks: There is strong uptrend momentum in the session and it will likely continue. Here, the trader will have a hands-off approach to profits while strongly considering adding on to the position. Positive candles with no lower “shadows” indicate a strong uptrend: let your profits ride!
• Positive candles (green) containing shadows or wicks: Strength continues to support the price action higher. At this point, with upside potential still present, the investor will likely consider the notion of adding to the overall position.
• A smaller candle body with longer wicks: Similar to the doji candlestick formation, this candle suggests a near-term turnaround in the overall trend. Signaling indecision, market participants are likely to wait for further directional bias before pushing the market one way or the other. Traders following on the signal will likely prefer confirmation before initiating any positions.
• Negative candles (red) containing shadows or wicks: Weakness or negative momentum is supporting the price action lower in the market. As a result, traders will want to begin exiting initial long positions or selling positions at this point.
• Negative candles (red) containing no shadows or wicks: Selling momentum is strong and will likely support a move lower in the overall decline. As a result, the trader would do well to add to existing short holdings.
Trading Made Simple Trading Strategy:
Trades are made between 06:00 GMT and 14:00 GMT. We enter a trade when green crosses red on the TDI at the beginning of that candle. If it is 3 or more candles, don’t enter the trade. Wait for another trade set up. The only exception is if green bounces off red and continues, then it is ok to reenter on the bounce. Exit your trade when the green TDI line goes flat, starts to hook over or makes a check mark reversal.
In this example, you can see when our conditions are met.
First yellow marked candle is where we sell and second marked candle is where we buy. Place your stop according to your risk appetite. Start trading this strategy on a demo account until you build your confidence and only then consider switching to a live account.
Download Trading Made Simple Forex Strategy Indicators and Template
- Stochastic Slope.ex4
- TDI Red Green.ex4