There are two types of strategies that many traders are drawn to in terms of how it gains profits. First, there are traders who are drawn to strategies with high accuracy. They are often drawn to strategies that could produce more wins more often even with a low risk-reward ratio. These are the types of strategies that could produce wins at about more than 60% of the time, while maintaining a 1:1 or 2:1 risk reward ratio. Then, there are also traders who would prefer high risk-reward ratios over high win rates. These traders would prefer having trades that have risk-reward ratios greater than 4:1, even if it means that their win rates would go below 50%.
Then, there are traders who aim to have the best of both worlds, a high win rate and a high risk-reward ratio. Traders who can do that are really good at what they do. These are the traders who seem to have the Midas touch. Almost any trade they take can turn into gold.
Midas Touch Forex Trading Strategy is a simple yet effective strategy that can help traders produce consistent profits over the long term. This is based on a combination of a decent win rate and a risk-reward ratio that is more than enough to satisfy most traders.
It uses a couple of indicators which on their own are highly reliable. However, when combined, these indicators produce trade setups that have a high probability of resulting in a win, with a good potential to produce high yields as the market expands.
Chandelier Stops v1
Table of Contents
- 1 Chandelier Stops v1
- 2 Stochastic Oscillator
- 3 Trading Strategy
- 4 Conclusion
Chandelier Stops v1 is a stop loss placement indicator which can also serve as a trend following or trend filter indicator.
This indicator is based on the concept of Average True Range (ATR) and its relationship to the trend. Many traders believe that price would seldom retrace by more than three times the length of the ATR. For this reason, they would trail their stop loss placements by around three times the length of the ATR. Some traders also use the multiplier of two instead of three.
The Chandelier Stops v1 indicator uses the same concept. It detects the trend direction and plots a line on the opposite side of the trend. This line is based on a dynamic ATR computation. Price action would usually retrace even with a trend in place. However, it would seldom retrace and close beyond the plotted line. If a price candle breaches the line and closes beyond it, then the Chandelier Stops v1 indicator would detect a trend reversal and shift the line on the other side of price action.
A blue line plotted below price action indicates a bullish trend, while a red line plotted above price action indicates a bearish trend. The shifting of the lines can be interpreted as a trend reversal.
Traders can also use this indicator to filter out trades that do not go with the flow of the trend. This eliminates one trend direction so traders would only have to decide when to take the trade in the direction of the trend.
The Stochastic Oscillator is a technical analysis too that measures the momentum of a price swing. The stochastic refers to the point of a current price in relation to its price range over a period of time. This means that the indicator compares the current price movement with the historical price data.
This indicator attempts to predict the cyclical movement of price action based on its current momentum. It does this by plotting two lines that oscillate within a range of 0 to 100. These two lines cross over each other whenever the momentum is reversing.
It also usually has markers on level 20 and 80. These markers indicate the normal range of the Stochastic Oscillator. If the lines drop below 20, the market would be considered oversold. On the other hand, if the lines breach above 80, then the market would be considered overbought. Crossover signals occurring on these areas tend to be very reliable as it indicates a trend reversal due to an overextended market price.
This trading strategy uses the Chandelier Stops v1 indicator as a trend filter. Trends are simply based on the color of the line and the general location of price action in relation to the Chandelier Stops v1 line.
On top of this, traders should also visually identify trend direction based on the swing highs and swing lows of price action. This concept plus the confirmation of the Chandelier Stops v1 line trend produces very reliable trend direction analysis.
As soon as we identify the trend direction, we could then wait for price to retrace causing the Stochastic Oscillator to temporarily reverse. The deeper the reversal of the lines, the more reliable the retracement is. Trades are taken as soon as the Stochastic Oscillator lines crossover in the direction of the trend, while price action is showing signs of rejecting the area near the Chandelier Stops v1 line.
- Stochastic Oscillator
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 Chandelier Stops v1 line should be below price action and should be color blue.
- Price action must be making higher swing highs and lows.
- Price should retrace towards the Chandelier Stops v1 line.
- Enter a buy order as soon as the faster Stochastic Oscillator line crosses above the slower line.
- Set the stop loss on the support level below the entry candle.
- Close the trade as soon as the faster Stochastic Oscillator line crosses below the slower line.
Sell Trade Setup
- The Chandelier Stops v1 line should be above price action and should be color red.
- Price action must be making lower swing highs and lows.
- Price should retrace towards the Chandelier Stops v1 line.
- Enter a sell order as soon as the faster Stochastic Oscillator line crosses below the slower line.
- Set the stop loss on the resistance level above the entry candle.
- Close the trade as soon as the faster Stochastic Oscillator line crosses above the slower line.
This trading strategy is a working trend following strategy based on trends and retracements.
Trends with clear price action swings that are confirmed by the Chandelier Stops v1 indicator tend to be the most reliable types of market conditions. These markets can produce the most consistent profits for trend following traders. It also has the potential to produce huge gains coming from strong swings towards the direction of the trend.
Traders who can master identifying the right market condition to use this strategy on and could read price action retracements and bursts can profit from this type of strategy.
Forex Trading Strategies Installation Instructions
Midas Touch 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.
Midas Touch 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 Midas Touch Forex Trading Strategy?
- Download Midas Touch 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 Midas Touch Forex Trading Strategy
- You will see Midas Touch 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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