Forex Strategy «Entropy»

Forex Strategy «Entropy» is based on a very interesting indicator, called entropy math, and this indicator is quite accurately indicated at the time the gain of a trend (present at a given time in the market), which allows to obtain a greater share of probability to achieve profits at the entrance to market. The strategy was originally developed for the currency pair USD / CAD, but later used on other pairs.

Some statistics:

From January to October 2015 only for the main currency pair strategy showed results of about 1800 points (4-digit quotations), despite the fact that the drawdown did not exceed 140 points (2 losing trades in a row).

Currency pair — USD / CAD. As a strategy it is also applicable to other currency pairs, but they should be further analyzed.

Timeframe — H4.

Indicators:

1) The indicator Entropy math with a period of 12, and with the added levels of 0.001 and 0.001.

2) With parameters Alligator indicator 13, 8, 5.

Terms and conditions for BUY of forex strategy «Entropy»:

1) Indicator Alligator revealed his «fall» up. That is all his line and look up in the following order (the order listed from top to bottom): green, red, blue.

2) At least one candle closed above the indicator Alligator.

3) entropy math indicator is above its level of 0,001. Important! In severe highs this indicator (which takes place after the previous census minimum indicator) should not be able to build a downward trend line. Otherwise, the transaction is not considered.

4) After all the signals are received, we are waiting for prices touch the upper line of the indicator Alligator, where he will sign a deal to buy. You can use a limit order, but it should be to correct every 4 hours for the corresponding value of the top line of the indicator Alligator.

5) Stop-loss is set at 70-75 points.

6) After passing the 75 points in the positive zone trade should be transferred to breakeven.

7) If the entropy math at the close of the next candle is lower than its level -0.001, the deal regardless of the current result of the transfer to breakeven. Even if the price is in the negative zone, take profit is already set to the entry point into the market.

8 ) The main goal is located at a distance 190 from the entry points.

9) To re-enter the market at least two indicator lines Alligator should at least touch. Only after this indicator once again lined up in the correct order, it will be possible to consider options for entering the market.

Conditions for the SELL of the strategy of «Entropy»:

1) Indicator Alligator revealed his «fall» down. That is all his line and look down in the following order (the order listed from top to bottom): blue, red, green.

2) At least one H4 candle closed below the indicator lines of Alligator.

3) The indicator entropy math is below its level of -0.001. Important! In the words of the minima of this indicator (which occurred after the census previous maximum value of the same indicator) should not be able to build a rising trend line. Otherwise, the input is not considered an option.

4) After receipt of all the above described signals, we are waiting for prices touch the bottom line of the indicator Alligator, where he will conclude a deal to sell. You can use a limit order (Sell Limit), but it should be to correct every 4 hours for the corresponding value of the bottom line of the indicator Alligator.

5) Stop-loss is set at a distance of 70-75 points.

6) After passing the 75 points in the positive zone, stop loss should be translated to zero — to move into the black.

7) If the entropy math at the close of the next H4 candle will be higher than its level of 0,001, the transaction regardless of the current result of the transfer to breakeven (swap to zero). Even if the price is still in the negative zone, take profit already tolerated at the entry point into the market.

8 ) The main purpose of take-profit located at a distance of 190 points from the point of entry into the market.

9) To re-examine the point of entry into the market at least two indicator lines Alligator should at least touch. Only after this indicator once again lined up in the correct order, it will be possible to consider options for entering the market.