Trend trading is one of the better ways to earn profits from the forex market. Trend following trades usually have a high reward-risk ratio, which allows traders to gain huge profits from time to time. Many trend following traders experience taking a trade that would trend for quite some time and produce returns that are four times their risk or even more. This is what most trend traders dream of, taking trades that would yield such returns every day. Although this is how trend following strategies work, it is quite difficult to time such trades. There would always be such type of trending move in a day for scalpers and day traders, and in a week or a month for swing traders. However, traders would often get left behind when these moves occur. Traders are left to watch as the market rallies without them being in the trade. What traders need is a trend following strategy that has a high probability of resulting in a huge trend, while still returning profits on some smaller trends.
The Bar Trend Forex Trading Strategy is a trend following strategy that could do just that. It allows traders to catch big trends, while still profiting on minor trends if used wisely.
Table of Contents
The BT1 indicator is a custom indicator which is overlaid on the price candles itself. It is a trend following indicator which indicates trend direction by painting bars that changes colors whenever it detects a change in trend. However, during non-trending market conditions, the indicator also stops painting bars. This makes it very useful as a short-term trend indicator, as it eliminates the confusion that other trend following indicators produce due to false signals.
The BSTrend indicator is a custom indicator which helps traders filter out trades based on trend direction. It is binary in nature. It only gives information regarding trend direction but does not show any lines. The only information that the trader would get is whether if the indicator is detecting a bullish trend or a bearish trend. The indicator paints a positive bar painted sky blue during a bullish trend, and a negative bar painted violet during a bearish trend.
This simple strategy is a trend following strategy that trades on trend reversals on the mid-term. It generates entry signals based on the confluence of the BT1 and BSTrend indicators, which are excellent complimentary indicators. These indicators also tend to produce trade setups that could lead to huge trends that run longer than usual.
- RISK: 8
- Period: 36
Timeframe: preferably 4-hour and daily charts
Currency Pairs: preferably major and minor pairs
Trading Session: Tokyo, London and New York
Buy Trade Setup
- The BSTrend indicator should be indicating an uptrend on the upper left portion of its window
- The BSTrend indicator should print a positive bar painted sky blue indicating a bullish trend bias
- The BT1 indicator should overlay a blue bar over the price candles indicating a bullish trend reversal
- Enter a buy order on the confluence of the above conditions
- Set the stop loss on the support level below the entry candle
- Close the trade as soon as the BT1 indicator overlays an orange bar over the price candles
- Close the trade as soon as the BSTrend indicator prints a negative bar painted violet
Sell Trade Setup
- The BSTrend indicator should be indicating a downtrend on the upper left portion of its window
- The BSTrend indicator should print a negative bar painted violet indicating a bearish trend bias
- The BT1 indicator should overlay an orange bar over the price candles indicating a bearish trend reversal
- Enter a sell order on the confluence of the above conditions
- Set the stop loss on the resistance level above the entry candle
- Close the trade as soon as the BT1 indicator overlays a blue bar over the price candles
- Close the trade as soon as the BSTrend indicator prints a positive bar painted sky blue
This simple strategy is one which could yield high returns if used on right market condition. This is because this strategy could provide signals for trades that could yield 4:1 or even more on many occasions. There will be many instances where a trade setup using this strategy would run for many candles. Swing traders could be holding to a trending market for even more than a week. It also allows traders to profit from huge trends by generating an entry at the start of the trend and allowing traders to hold on to the trade up to the end of the trend. There will be drawdown periods caused by choppy markets, however the profits on the high yielding trades are usually several times bigger than the losses.
Losses on choppy markets could also be avoided. Traders could make use of this strategy in conjunction with breakouts of support or resistance in order to create an even higher probability trade setup. Traders should also make use of good trade management strategies which includes moving the stop loss to breakeven when possible and trailing the stop loss in order to protect profits. One of the better ways to trail the stop loss using this strategy is by placing the stop loss on newly created fractals as these levels are natural horizontal supports and resistances on the short term.
Trading this strategy on the right type of market, one with enough volatility and the tendency to trend, would provide decent profits for traders if used rightly.
Forex Trading Strategies Installation Instructions
Bar 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.
Bar 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 Bar Trend Forex Trading Strategy?
- Download Bar 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 Bar Trend Forex Trading Strategy
- You will see Bar 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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