Forex strategy «Red Dragon H4» is a classic trend strategy. On a strong trend, it gives excellent signals at the moments of completion of corrections. With a protracted reversal, the trading system very rarely generates signals, which will allow it not to go into a drawdown.
Statistics:
From January 2022 to January 2023, the strategy showed a positive result of +3250 points, and this is only for two pairs (GBP/USD and EUR/USD). At the same time, the strategy is quite applicable to other pairs.
- The currency pair is multi-currency.
- Time interval — H4.
Indicators:
- Exponential moving average with a period of 120 — EMA120.
- Exponential Moving Average 14 — EMA14, built at Low prices.
- The same EMA14 built at High prices.
- Parabolic SAR indicator with 0.01 increments and 0.2 maximum.
- Accelerator Oscillator indicator.
Conditions for purchases of «Red Dragon H4»:
1) At the close of the next candle, the Parabolic SAR indicator jumps from top to bottom and ends up under the candles.
2) This same candle should be closed above EMA14 (high).
3) It should also be closed above EMA120.
4) The Accelerator Oscillator indicator is above zero.
5) If all conditions are met, then at the opening of the next candle a buy deal is made.
6) Stop loss is set behind ЕМА14 (low). If the minimum of the signal candlestick is below, then the stop should be placed exactly under it.
7) After the price passes in the positive zone of a distance equal to the size of the stop, the transaction should be transferred to breakeven.
8) Take profit is set at twice the size of the stop.
9) A new deal in the same direction can be considered if the previous one has already been moved to breakeven.
Sales conditions:
1) At the close of the next H4 candle, the Parabolic SAR indicator jumps up and down and is above the candle.
2) It is the same candle that should be closed below the moving average EMA14 (low).
3) It should also be closed below the average ЕМА120.
4) The Accelerator Oscillator indicator is below its «0» mark.
5) If all conditions are met, then a sell trade is opened at the opening of the next H4 candle.
6) We insure the deal with a stop loss, which is set behind ЕМА14 (high). If the high of the signal candlestick is higher, then stop loss should be set just behind it.
7) After the price in the “+” zone has passed a distance equal to the size of the stop, the transaction should be transferred to the breakeven level.
8) Take profit should be set at 2 times the size of the stop.
9) A new transaction in the same direction (sell) can be considered only if the previous one has already been transferred to the breakeven point.
Video version of the forex strategy «Red Dragon H4»:
- Video from our partners. Recommended to watch with English subtitles!
- Download MT4 template — red_dragone_tpl
- All indicators are present in any MT4, so they will be attached to the chart with the necessary parameters immediately after the template is installed.
