As traders we often look for strategies with great accuracy. We are often attracted to strategies that show high win rates or strike rates. Yet at the same time we also want strategies that have high reward-risk ratios. This is often the aim of most traders, to have a win rate that is almost perfect and wins that are several times bigger than that of the losses. We hope to find that Holy Grail that allows us to have the best of both worlds.
You cannot have your cake and eat it too. Often traders would get one over the other. It is either that they have strategies with extremely high win rates or strategies with extremely high reward-risk ratios. Most traders have strategies that are somewhat in between. Just enough to make their strategies profitable over the long run.
The question is how we get to trade setups wherein there is a decent amount of reward-risk ratio while still having a decent win rate.
It is all about confluences. Trading with confluences often mean we are trading with a decent probability and that there is momentum behind the trade. Enough momentum for many traders to take notice.
Advanced Super Trend Forex Trading Strategy is a strategy that provides traders relatively high probability trade setups with the chance to gain decent yields on trades that would result in a trend. It makes use of three indicators that are complementary to each other and could give traders accurate trend signals.
Super Trend Indicator
Table of Contents
- 1 Super Trend Indicator
- 2 Octopus Indicator
- 3 Hull Moving Average
- 4 Trading Strategy
- 5 Conclusion
The Super Trend indicator is a trend following technical indicator which helps traders identify momentum, trend reversals and the general direction of the market.
It is a simple indicator that makes use of the Average True Range (ATR) as a basis for identifying trend direction. It multiplies the ATR by a multiplier preset by the trader. It then plots a line on the price chart opposite the direction of the trend. If price breaches this level, then the market is reversing.
The indicator plots a lime line below price action to indicate a bullish trend and plots a red line above price action to indicate a bearish trend. Trend reversal signals can be generated based on the shifting of the line and the changing of its color.
The Octopus indicator is a trend following indicator mainly used to filter trades based on trend bias or trend direction.
It plots bars that simply change color whenever it detects a trend reversal. Green bars indicate a bullish trend bias, while red bars indicate a bearish trend bias.
Traders use it as a trade filter to avoid trades that are going against the current trend. However, it could also be used as a confirmation of a trend reversal based on the changing of the color of the bars.
Hull Moving Average
Moving averages are probably one of the most widely used type of technical indicator and this is for good reasons. Moving averages are useful because it helps traders identify trend direction and even trend reversals which are excellent trade entry setups.
However, most moving averages have two common disadvantages. Moving averages tend to be lagging and produce signals which could be a tad later than what traders would want. Moving averages also tend to produce false signals during choppy and noisy market conditions.
The Hull Moving Average (HMA) was developed in order to address these disadvantages. It is a moving average which tend to be very fast and responsive. At the same time, it also manages to smoothen out the movement of the moving average line. This gives us a moving average line which is very responsive yet is also less susceptible to false signals due to market noise.
This version of the HMA plots a line that changes color whenever it detects a probable trend reversal. It plots a green moving average line to indicate a bullish trend or a dark violet line to indicate a bearish trend. Traders could use the changing of the color of the line as a signal of a probable trend reversal.
This trading strategy is a trend reversal strategy that produces trade entries based on the confluence of three trend following indicators mentioned above.
The signal coming from the Super Trend indicator will be based on the shifting of the Super Trend line and the changing of its color.
On the Octopus indicator, trend reversal signals will simply be based on the changing of the color of its bars.
The Hull Moving Average signal on the other hand will also be based on the changing of the color of its moving average line.
- Period: 84
- SuperTrend (default setting)
- Octopus_1 (default setting)
Preferred Time Frames: 1-hour, 4-hour and daily charts
Currency Pairs: FX majors, minors and crosses
Trading Sessions: Tokyo, London and New York sessions
Buy Trade Setup
- The Super Trend line should shift below price and should change to lime.
- The Octopus indicator bars should change to green.
- The Hull Moving Average line should change to green.
- These bullish trend reversal signals should be closely aligned.
- Enter a buy order on the confluence of the conditions above.
- Set the stop loss below the Super Trend line and the Hull Moving Average line.
- Close the trade as soon as the Super Trend line shifts above price and changes to red.
- Close the trade as soon as the Octopus indicator bars change to red.
- Close the trade as soon as the Hull Moving Average line changes to dark violet.
Sell Trade Setup
- The Super Trend line should shift above price and should change to red.
- The Octopus indicator bars should change to red.
- The Hull Moving Average line should change to dark violet.
- These bearish trend reversal signals should be closely aligned.
- Enter a sell order on the confluence of the conditions above.
- Set the stop loss above the Super Trend line and the Hull Moving Average line.
- Close the trade as soon as the Super Trend line shifts below price and changes to lime.
- Close the trade as soon as the Octopus indicator bars change to green.
- Close the trade as soon as the Hull Moving Average line changes to green.
This strategy provides trade entry signals that have a decent win probability and could produce decent yields.
The confluence of these complementary indicators provides a strong indication of a trend reversal which often results in an actual trend reversal.
Having an open-ended exit strategy allows traders to capitalize on gains coming from trade setups that do result in a trend.
Forex Trading Strategies Installation Instructions
Advanced Super Trend Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Advanced Super Trend Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Advanced Super Trend Forex Trading Strategy?
- Download Advanced Super Trend Forex Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Advanced Super Trend Forex Trading Strategy
- You will see Advanced Super Trend Forex Trading Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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