Forex Strategy «Quiet position» is a simple trend-based system forex indicators that are available on any trading platform Metatrader 4:
- SMA (21) — simple moving average with a period averaging 21, which is based on closing prices
- Stochastic Oscillator — Stochastics (% K period — 5, period% D — 3, slowing 3).
Analysis of chosen any currency pair produce on the timeframe Daily. The location of the market prices in relation with a moving average SMA (21) indicates the main trend of the situation at the moment. Ie Average SMA (21) — is like a «waterline» of the forex market — if prices at the moment, located above the moving average, then we will open the transaction only buy if the prices are below — we will deal only open for sale. Roughly it looks like this:
Now that we have no problems to decide which direction we will open a deal, let’s define the time of entry into the trading position of forex strategy «Quiet position:
And so for the transaction to the implementation of 3 conditions:
1) availability of the required setup for the opening of the transaction;
2) The presence of a trigger to open the transaction;
3) allowing the signal to the input filter into the market.
If all these conditions are met — are opening a bargain at the price of opening of the next candle.
And now look at these terms more detail:
Trade setup for the opening of the transaction — the provision of 2 bars was close relative to the moving average SMA (21). These two candles should be on one side of our moving average. It is also possible that the 1-st candle was placed on one side of the mean, and its high or low (it depends on the direction of the opening of the desired trading position) was on the opposite side from the middle — where is the 2-I spark setup.
All the candles on the left of the picture drawn on a red rectangle are the candles «setup for the BUY.» All the candles to the right of this red rectangle — Candles «setup for SELL» (according to the rules of the location of the market in relation to the SMA (21)). However, they are two candles in the rectangle are not candles trade setup. This condition is necessary to ensure that the trader does not enter into any transaction on the day of a trend reversal in the market.
TRIGGER for the deal — closing the current trading day below the minimum price the previous trading day for transactions concluded on the sale and closing of the current trading day above the previous high price for the transactions concluded on the purchase.
Look at the examples of these situations:
Of the filter of a stochastic oscillator:
As soon as the% K line crosses the% D from the bottom up, we get a signal on the deal on the purchase, and on the contrary — down — up for sale. Be sure to note that the trading signals that come from the overbought (80), and from oversold (20) should be ignored!
Now let’s combine a all conditions for the opening of trading positions together to trade forex strategy «quiet position».
Example see in the picture:
And here’s another example:
Safety stop-loss strategies for forex «Quiet position»:
Stop-loss orders should be installed simultaneously with the opening of a trading position — they will be the maximum of the last 3 trading days for the transactions concluded on the sale or at least the last 3 days for transactions on a purchase.
See an example
Closing transactions with profit at the price of the opening of the trading day following the day, which closed above the previous high for the transactions made on the sale and the opening price of the trading day following the day, which closed below the previous low for commercial transactions on the purchase.
Support of trade deals:
In markets 6E (currency futures — analogue EURUSD) and 6J (currency futures — analogue USDJPY) after the opening of trade transactions should be carried out escort trading position. Ie Once established on 1 st extremum in the lucrative area should be moved to our stop order on the top of this extremum. And after that, every day of transfer that a stop order (otherwise it is called «anti-trade») for a maximum close a trading day for transactions on sale at least close a trading day for transactions to buy, as long as the market itself is not closes our open trading position.
As it is necessary to draw attention to a small addition: If you did not work established the order «stop-trade» and appeared on the market condition for closing the trade position with a profit, then you should close this trading position at the opening of the next trading candles.