Elliott Wave Cross Forex Trading Strategy

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Elliott Wave Cross Forex Trading Strategy 2

Crossover strategies are probably one of the more popular types of trading strategies among newbie traders. This is probably due to its ease of use. You simply trade whenever moving averages would crossover. However, many new traders who first try out crossover strategies often have unrealistic expectations about trading. This is probably due to some of the hype placed around some crossover strategies. You would often hear claims of 90%- or 99%-win rate using a certain strategy. Most of it are not true, especially when it is applied to crossover strategies. This is because crossover strategies are trend following or trend reversal types of strategies. Most trend reversal strategies bank on high reward-risk ratios instead of high win rates. So, instead of looking for strategies that are right 99% of the time, look for strategies that would allow you to gain more than twice compared to what you have risked on the stop loss.

The Elliott Wave Cross Forex Trading Strategy is one of those trend following or trend reversal strategies that allow traders to cash in on huge moves, while still having a decent win rate.

Alligator Indicator

The Alligator Indicator is a custom indicator which is used for crossover strategies. It is composed of the three moving averages, which the developer calls Jaws, Teeth and Lips. The Jaws represent the long-term moving average, the Teeth represent the mid-term moving average, while the Lips represent the short-term moving average. These moving averages could be set at different periods and could be shifted forward or back. This allows traders to customize their crossover trading strategies depending on what works for them.

EMA 5 10 34 Crossover Indicator

The EMA 5 10 34 Crossover indicator is another custom indicator that is developed specifically for crossover strategies. As the name suggests, its standard parameters make use of Exponential Moving Averages (EMA) with the short-term moving average at 5, mid-term moving average at 10 and long-term moving average at 34. However, this default setup could be customized. The time periods of each moving average could be changed as well as the type of moving average used. This indicator then prints arrows indicating a change in trend direction based on the crossover of the moving averages.

Elliott Wave Oscillator

The Elliott Wave Oscillator is a simple oscillating indicator which is also based on crossovers of moving averages. In fact, it is a basic assessment of the difference between moving averages. It is computed by subtracting the value of the short-term moving average to the long-term moving average. The resulting difference would then be plotted as histogram bars on its own window. It then prints positive histograms whenever it detects a bullish trend and negative histograms if it detects a bearish trend.

Trading Strategy

The Elliott Wave Cross Forex Trading Strategy is based on the confluence of the above indicators, which are essentially crossover indicators.

The EMA 5 10 34 indicator and the Elliott Wave Oscillator would serve as the longer-term trend filter. These indicators would usually change directions almost at the same time. An arrow indicating a change in direction would usually appear whenever the Elliott Wave Oscillator would also cross its midline.

The Alligator Indicator would then represent the actual entry signal. A trade setup is generated whenever the short-term moving average would crossover the mid-term and long-term moving averages. However, these crossovers should agree with the EMA 5 10 34 Crossover indicator and the Elliott Wave Oscillator.

Indicators:

  • EMA 5 10 34 CrossoverI
  • Alligator
    • Jaws Period: 28
    • Jaws Shift: 8
    • Teeth Period: 12
    • Teeth Shift: 5
    • Lips Period: 7
    • Lips Shift: 3
  • Elliott Wave Oscillator34

Timeframe: 1-hour, 4-hour and daily charts

Currency Pairs: major and minor pairs

Trading Session: Tokyo, London and New York Sessions

Buy Trade Setup

Entry

  • A blue arrow pointing up should be printed on the chart indicating a bullish trend reversal
  • The Elliott Wave Oscillator should be printing positive histograms indicating a bullish trend
  • Enter a buy order as soon as the lime line crosses above the red and blue lines indicating a bullish trend reversal

Stop Loss

  • Set the stop loss below the moving averages

Exit

  • Close the trade as soon as the Elliott Wave Oscillator starts printing negative histograms

Elliott Wave Cross Forex Trading Strategy 1

Elliott Wave Cross Forex Trading Strategy 2

Sell Trade Setup

Entry

  • A red arrow pointing down should be printed on the chart indicating a bearish trend reversal
  • The Elliott Wave Oscillator should be printing negative histograms indicating a bearish trend
  • Enter a sell order as soon as the lime line crosses below the red and blue lines indicating a bearish trend reversal

Stop Loss

  • Set the stop loss above the moving averages

Exit

  • Close the trade as soon as the Elliott Wave Oscillator starts printing positive histograms

Elliott Wave Cross Forex Trading Strategy 3

Elliott Wave Cross Forex Trading Strategy 4

Conclusion

The Elliott Wave Cross Forex Trading Strategy is basically a confluence of trade signals based on moving average crossover strategies. This allows traders to filter out trend reversals that are of low probability and allows traders to take trades with a high probability of resulting in a strong trend.

This trading strategies relies heavier on high yielding trades rather than an extremely high win ratio. It allows traders to catch trades that would result to reward-risk ratios of 3:1 to 6:1, sometimes even higher. However, its win ratio is still respectable due to the fact that it causes traders to take trades that are only of high quality.


Forex Trading Strategies Installation Instructions

Elliott Wave Cross 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.

Elliott Wave Cross 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 Elliott Wave Cross Forex Trading Strategy?

  • Download Elliott Wave Cross 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 onTemplate
  • Move right to select Elliott Wave Cross Forex Trading Strategy
  • You will see Elliott Wave Cross 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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