When I first started trading, I once asked a senior trader how to know if the market is starting to trend or starting to breakout. His answer did not seem to make sense at first, yet it was very logical. He said that you would know if the market is trending if there is a clear trend that is being formed. It really did not make sense until he explained it. He said most traders take trend reversal trades purely based on indicators. Sometimes traders blindly follow indicators to a fault. Then he said a trend is a trend when it is either making higher swing highs and swing lows or it is making lower swing highs and swing lows. He said this is the confirmation that traders should look for. Indicators are fine and they help traders find clarity in an otherwise confusing market. However, it is price action that makes the indicators do what they do. It is best to combine the confirmation of price action and indicators. This concept opened my eyes to seeing charts differently.
Confirmation is key. Trading is not taking a trade at the first sign of a reversal. Astute traders wait for confirmation. In the case of a trend reversal, we wait for price to create higher swing highs and swing lows in an uptrend or lower swing lows and swing highs in a downtrend.
Double Trend Synergy Forex Trading Strategy is a simple trading strategy that incorporates trend reversal signals from two highly reliable indicators together with a price action trend reversal setup.
Heiken Ashi Moving Average
Table of Contents
- 1 Heiken Ashi Moving Average
- 2 Double Trend Profit
- 3 Trading Strategy
- 4 Conclusion
HAMA stands for Heiken Ashi Moving Average. The Heiken Ashi Moving Average is a trend following technical indicator which is a variation of the standard Heiken Ashi Candlesticks yet is derived from moving averages.
Heiken Ashi literally means average bars in Japanese.
While the Heiken Ashi Candlesticks are simply candlestick formations which average out a candle on its open and close, the HAMA indicator is totally different. It plots bars on the price chart that changes color just like the Heiken Ashi Candlesticks, but these bars behave more like an Exponential Moving Average (EMA).
The HAMA indicator changes color depending on the direction of the trend. Blues bars indicate a bullish trend while red bars indicate a bearish trend. Larger bars indicate a strengthening trend, while smaller bars indicate a weakening trend or a retracement.
Double Trend Profit
Double Trend Profit is a trend following custom indicator which is based on moving averages.
This indicator plots two custom moving average lines which follow price action quite responsively. These two lines crosses over and interact depending on the direction of the trend. It also changes color depending on the slope of the lines.
The faster line is color green when the line is sloping up and red when the line is sloping down. The slower line is blue when sloping up and white when sloping down.
Traders can spot trend reversal signals based on the crossing over of the two lines coupled with the changing of the color of the lines.
This trading strategy provides trade signals based on the crossing over of the Double Trend Profit lines and the HAMA bars.
First, the Double Trend Profit lines should crossover and change color indicating a new trend.
Then, the HAMA bars should also change color indicating the direction of the new trend.
Then, the Double Trend Profit lines should crossover the HAMA bars. These signals will just be an initial indication of a trend reversal.
The trend reversal is then confirmed after price creates a swing point in the direction of the new trend, retraces, then creates a swing point without breaching the HAMA bars. As soon as this price action is confirmed, then the trend reversal setup becomes valid and tradable.
Preferred Time Frames: 30-minute, 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 faster line of the Double Trend Profit indicator should cross above the slower line.
- The lines should change to green and blue.
- The HAMA bars should change to royal blue.
- The Double Trend Profit lines should cross above the HAMA bars.
- Price action should retrace towards the HAMA bars then reject the area.
- Enter a buy order as soon as price action creates a swing low on the area of the royal blue HAMA bars.
- Set the stop loss on the swing low below the entry candle.
- Close the trade as soon as the HAMA bars change to red.
Sell Trade Setup
- The faster line of the Double Trend Profit indicator should cross below the slower line.
- The lines should change to red and white.
- The HAMA bars should change to red.
- The Double Trend Profit lines should cross below the HAMA bars.
- Price action should retrace towards the HAMA bars then reject the area.
- Enter a sell order as soon as price action creates a swing high on the area of the red HAMA bars.
- Set the stop loss on the swing high above the entry candle.
- Close the trade as soon as the HAMA bars change to royal blue.
This trading strategy is a good trend following strategy that could help traders earn consistent profits.
The confirmation of a swing point that does not cause the HAMA bars to change color indicates that the trend is holding. Such confirmations help improve the accuracy of the trade based on price action.
Because this strategy trades on fresh trends right near the start of the trend and exits at the end of a trend, it allows traders to squeeze out as much profits from the new trend. If the trend lasts longer, traders can profit so much from each trade.
Forex Trading Strategies Installation Instructions
Double Trend Synergy 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.
Double Trend Synergy 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 Double Trend Synergy Forex Trading Strategy?
- Download Double Trend Synergy 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 Double Trend Synergy Forex Trading Strategy
- You will see Double Trend Synergy 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.
Click here below to download: