100 Pips Power Trend Forex Day Trading Strategy

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100 Pips Power Trend Forex Day Trading Strategy 1

Many new traders often get attracted to the prospect of being a day trader. The idea of making money while sitting in front of your trading desk might sound appealing to them. Maybe movies and TV shows made the idea of being a day trader sound sexy. Although day trading is far from what is shown in the movies, to the right type of trader, day trading could be a fast way to earn big money. It is not the easiest way to earn, but if you get it right you sure could profit from the forex markets day in and day out.

The 100 Pips Power Trend Forex Day Trading Strategy could help traders who have the desire to trade on a daily basis. Although it could work for any type of trader, whether a scalper, day trader or a swing trader, it is one which fits day traders best. The indicators used in this strategy works well in detecting short- and mid-term trend changes, which has a tendency to last even longer, especially when aligned with a longer-term trend.

100 Pips Oracle Strength Indicator

The 100 Pips Oracle Strength indicator is a momentum indicator which aids traders in identifying short-term trend biases. This indicator indicates trend directions by printing bars on a separate window. These bars are color coded based on the direction of the trend. Blue bars indicate a bullish trend, red bars indicate a bearish trend, while yellow bars indicate a non-trending or weakly trending market condition.

This market excels in helping traders identify meaningful short-term trend reversals. Unlike with other momentum indicators, the 100 Pips Oracle Strength indicator prevents traders from taking low quality trade signals, which occurs during a range bound market. Since this indicator remains yellow during range-bound market conditions, traders would have to wait for a clear signal, indicated by a blue or red bar. These colors often occur when price movements are showing to have momentum behind the candles.

AVQ Trend Indicator

The AVQ Trend indicator is a momentum-based indicator which helps traders identify the mid-term trend direction and reversals. It indicates trend direction by overlaying bars on the price chart. The bars are then color coded based on the direction of the trend. Green bars indicate a bullish trend direction, while red bars indicate a bearish trend direction. Trade signals are typically generated whenever the bars change colors.

50 EMA – Exponential Moving Average

The 50-period Exponential Moving Average (EMA) is a staple moving average for many traders, whether retail traders or banking and institutional traders. It is often used to indicate the mid-term trend. Traders would usually judge the mid-term trend direction based on the location of price in relation to the 50 EMA. Other traders would use the slope of the 50 EMA to judge trend direction.

Trading Strategy

This day trading strategy produces trade entries based on the confluence of the 100 Pips Oracle Strength indicator and the AVQ Trend indicator. Trades are taken whenever the two indicators point toward the same trend direction. These trend reversal signals tend to produce great results whenever the signals are somewhat aligned.

However, not all trade signals should be taken. Trades should be filtered based on the trend direction of the 50 EMA. This is to align our trade direction to the mid-term trend for the day. This increases the probability of having a winning trade.

This strategy also works best when taking trades that are based on a momentum candle or a momentum candle is produced prior to the entry candle.

Indicators:

  • AVQ_trend
    • Smoothing: 15
  • 100pips Power
  • 50 Exponential Moving Average (gold)

Timeframe: preferably used on the 5-minute chart but could still work with other timeframes

Currency Pairs: major and minor pairs only; no exotic pairs

Trading Session: preferably the trading session of the currency being traded (Tokyo, London and New York)

Buy Trade Setup

Entry

  • Price should be above the 50 EMA indicating a bullish mid-term trend
  • The AVQ Trend indicator’s bars should change to green indicating a bullish trend reversal
  • The Oracle Strength indicator’s bars should change to blue indicating a bullish trend reversal with momentum
  • These bullish trend reversal signals should be somewhat aligned
  • Enter a buy order on the confluence of these conditions

Stop Loss

  • Set the stop loss on the support level below the entry candle

Exit

  • Close the trade as soon as the AVQ Trend indicator bars change to red
  • Close the trade as soon as the Oracle Strength indicator changes to red

100 Pips Power Trend Forex Day Trading Strategy 1

100 Pips Power Trend Forex Day Trading Strategy 2

Sell Trade Setup

Entry

  • Price should be below the 50 EMA indicating a bearish mid-term trend
  • The AVQ Trend indicator’s bars should change to red indicating a bearish trend reversal
  • The Oracle Strength indicator’s bars should change to red indicating a bearish trend reversal with momentum
  • These bearish trend reversal signals should be somewhat aligned
  • Enter a sell order on the confluence of these conditions

Stop Loss

  • Set the stop loss on the resistance level above the entry candle

Exit

  • Close the trade as soon as the AVQ Trend indicator bars change to green
  • Close the trade as soon as the Oracle Strength indicator changes to blue

100 Pips Power Trend Forex Day Trading Strategy 3

100 Pips Power Trend Forex Day Trading Strategy 4

Trading Strategy

This strategy works well as a day trading strategy on the 5-minute chart. On this timeframe, you will be holding a profitable trade for about an hour or even more. This will allow traders to profit well enough beyond the trading cost hurdle, which many traders find difficult to overcome.

Trade this strategy in a market condition that is showing good signs of trending on the mid-term and align your trade with that trend. Market spikes are also common on the lower timeframes so moving the stop loss to breakeven whenever possible is also a good idea. This would allow you to have a good win rate.

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