Forex Strategy Battle of the Bands — This trading system was originally designed for trading in the securities market, but because of its simplicity and universality — moved to the forex market, and the reasons she impulsivity price movement and a few simple indicators forex, which are present in any Terminal Metatrader 4. The recommended time frame — from H1, the currency pair can be arbitrary.
For trade, we need the following indicators forex:
- Simple Moving Average SMA (32) (applied to high) and a simple moving average SMA (32) (applied to Low) — form a channel on the chart moving averages.
- Trend indicator Parabolic SAR (step 0.02, maximum 0.2)
- Two simple moving average SMA (100) and SMA (200), applied to a Close — Additional indicators (recommended for use, but not required)
Rules for the conclusion of a deal to buy the strategy Battle of the Bands:
- Price must close above the average SMA (1932) High — ie above the moving average formed channel.
- Price is above the moving average 100/200 SMA — recommended operating conditions, but not mandatory.
- Closing price of the bar should be higher than the opening price of the bar
- Price must «penetrate» Parabolic SAR from the bottom up, ie Parabolic points should top down — by price (it is on this candle)
- If formed candle Dodge or Pin-bar — the signal should be ignored! If the closing price of the bar below the price bar opening — should wait for the next candle and make sure that all of the above conditions are met.
The rules for the transaction to sell at a strategy for Battle of the Bands:
Price must close below the average SMA (32) Low — ie below the moving average formed channel.
Price is below the moving average 100/200 SMA — recommended operating conditions, but not mandatory.
Closing price of the bar must be below the price bar opening
Price must «penetrate » Parabolic SAR downwards, ie Parabolic points should the bottom up — above the price (it is on this candle)
If formed candle Dodge or Pin-bar — the signal should be ignored! Ifthe closing price of the bar above the opening price of the bar — you should wait the next candle and make sure that all of the above conditions are met.
Stop-loss immediately after the transaction is placed under the closest fractal (local minimum) below the average SMA (32) Low — for sale. Or above the nearest of a fractal (local maximum) above the average SMA (1932) High — for sale.
Once the price has gone in our direction and closed the next candle after the opening of the transaction — fix a profit of 50% (or 1 / 2) from an open transaction (or if you open such a deal two separate lots, then close one of them). Immediately after the closure of 1 / 2 of the transaction, transfer the balance of the position to breakeven!
Then our profitable stop-loss (or in other words, a Stop-trade), we move every time after the appearance of a new point indicator Parabolic SAR. This you can do at the opening of each new candle or use for this versatile trailing stop, which will make it for you automatically.