Imagine a freight truck running full speed on an open highway. You would not want to step in front of it, right? It is big and massive, and it is speeding down the road. Anything that is placed in front of it will surely be crushed. That is momentum. It has volume and it has speed.
Just like the analogy of a truck, momentum trading is also devastating to those who would trade against it. It would be like stepping in front of the truck. However, trading with it could be a very good idea. Momentum could push your trade forward and yield huge profits.
So, how do we identify momentum in trading? We have to look for two things, speed and volume. We have to look for candles that show price moving a significant distance within one candle.
Momentum Hyper Trend Forex Trading Strategy is a strategy that provides trade signals based on momentum and a confluence of other factors that point the same direction. It makes use of indicators that are geared towards finding trend reversals that are based on momentum. This provides high probability trades that could provide huge gains.
Trigger Lines Indicator
Table of Contents
The Trigger Lines indicator is a custom momentum indicator which aids traders in identifying trend direction. This indicator draws two modified moving average lines on the price chart, which are optimized to identify momentum shifts.
This indicator also provides trade signals by changing the color of the moving average lines. Bullish trends have moving average lines that are colored blue, while bearish trends have moving average lines that are colored red. These trade signals are also based on the crossing over of the two moving average lines, which are set to indicate the medium-term trend.
Volatility Hyper Trend Indicator
The Volatitliy Hyper Trend indicator is a custom indicator that indicates trend and trend reversals based on momentum. This indicator detects trend changes by incorporating volatility in its formula.
This indicator draws two lines. Its main line, called the median, is colored green. This line shadows price action movements much like other oscillating indicators. The second line is much like a signal line. It indicates trend directions based on its location in relation to the median. It changes to color red whenever it is below the median, indicating a bullish market condition. Inversely, it also changes to blue whenever it is above the median, indicating a bearish market condition. It also conveniently provides trade signals by placing arrows on the price chart whenever it detects a trend reversal based on the crossing over of the median line and its signal line.
This strategy is a momentum trading strategy based on the confluence of a momentum candle, the Trigger Lines indicator and the Volatility Hyper Trend indicator.
The Trigger Lines indicator and the Volatility Hyper Trend indicator are complementary indicators that provide high probability trade setups whenever the two indicators provide trade signals at the same time. Interestingly these confluence of trade signals usually occur on a momentum candle.
To trade this strategy, all three conditions must be aligned, a momentum candle, a trend reversal on the Trigger Lines indicator, and a trend reversal on the Volatility Hyper Trend indicator.
We will be defining a momentum candle as a long, full-bodied candle, with little to no wicks. These candles signify a strong price movement within one candle and typically occurs whenever there is a huge volume of trade behind it.
- Rperiod: 36
- Volatility Hyper Trend
Timeframe: preferably 15-minute, 1-hour, 4-hour and daily charts
Currency Pairs: major and minor pairs; trade the currency of the trading session you are trading on when day-trading
Trading Session: Tokyo, London and New York
Buy Trade Setup
- Price should cross and close above the Trigger Lines indicator
- A strong bullish momentum candle should appear
- The Trigger Lines indicator should change to blue indicating a bullish trend reversal
- The Volatility Hyper Trend indicator should crossover with the green line above the red line indicating a bullish trend reversal
- The Volatility Hyper Trend indicator should print a blue arrow pointing up indicating a bullish trend reversal
- These trend reversal signals should be closely aligned
- 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 Trigger Lines indicator changes to color red
Sell Trade Setup
- Price should cross and close below the Trigger Lines indicator
- A strong bearish momentum candle should appear
- The Trigger Lines indicator should change to red indicating a bearish trend reversal
- The Volatility Hyper Trend indicator should crossover with the green line below the blue line indicating a bearish trend reversal
- The Volatility Hyper Trend indicator should print a red arrow pointing down indicating a bearish trend reversal
- These trend reversal signals should be closely aligned
- 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 Trigger Lines indicator changes to color blue
This trading strategy is a high probability trading strategy which could provide positive expectancy on each trade. Trades would usually yield profits with a reward-risk ratio of around 2:1.
The individual trading indicators used in this strategy could already provide high probability and high yielding trade setups even as a standalone indicator. Combining these indicators together and adding the momentum candles to the mix provides an even better trade signal.
When used with the right trade management strategy, this strategy should provide consistent profits.
Forex Trading Strategies Installation Instructions
Momentum Hyper 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.
Momentum Hyper 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 Momentum Hyper Trend Forex Trading Strategy?
- Download Momentum Hyper 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 Momentum Hyper Trend Forex Trading Strategy
- You will see Momentum Hyper 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.
Click here below to download: