Momentum breakouts is a type of market condition wherein price is moving strongly in one direction, usually within a few candles and at times even started with just one price candle. These candles often breakout of a market contraction phase which are usually characterized by small price, indecisive price candles. The sudden appearance of long full-bodied candle indicate that a market event has occurred that caused traders to either buy or sell immediately.
Momentum breakouts have so much potential. This is because momentum breakouts are often the beginning of a fresh trend. Traders who could catch these fresh trends and ride it out until the end could earn huge yields in a single trade.
Echter, momentum traders also tend to chase price as the market moves in a certain direction. Momentum traders need a systematic momentum trading strategy which should allow them to objectively identify a proper momentum breakout signal which could result in a fresh trend.
Bollinger Bands
The Bollinger Bands is one of the most versatile technical indicators. It is a trend following technical indicator, which also provides traders information regarding volatility and could also be used to identify mean reversals as well as momentum breakouts.
The Bollinger Bands indicator is composed of three lines.
De middelste lijn is een 20-periode Simple Moving Average (Sma) Lijn. Als zodanig, traders can use it as a trend indicator. Trend direction can be identified based on the slope of the middle line, as well as the general location of price action in relation to the line. Trend reversal signals could also be identified based on the crossing over of price action and the middle line.
The two outer lines are basically standard deviations from the middle line. These lines are usually set at two standard deviations shifted above and below the middle line.
Since the outer lines are based on a standard deviation, the Bollinger Bands can be used to identify volatility. Expanding bands indicate an expanding market phase, while contracting bands indicate a contracting market phase.
Mean reversal traders also use the Bollinger Bands to identify probable mean reversals from overbought or oversold price conditions. The area outside the outer lines are considered oversold and overbought areas. Price candles showing signs of price rejection outside of the line could indicate that price is either overbought or oversold and could soon reverse.
Momentum traders on the other hand use the outer lines as a basis for a momentum breakout. Strong momentum candles breaking outside of the Bollinger Bands can be interpreted as a momentum breakout coming from a market contraction phase.
Exponentiële voortschrijdende gemiddelden
One of the most popular ways traders identify potential trend reversals is based on the crossover of moving average lines. With the right parameters and when used in the right market condition, moving average crossover signals can be very effective.
Exponential Moving Averages Signals is based on this concept. It plots arrows whenever it detects its underlying moving average lines crossing over. The direction the arrow is pointing indicates the direction of the trend.
Deze indicator maakt gebruik van exponentiële voortschrijdende gemiddelden (EMA) because this type of moving average line tends to be very responsive to price movements, making it ideal for trend reversal signals.
Coppock Indicator
The Coppock indicator is a custom technical indicator used to help traders identify trend direction. It is an oscillator type of indicator which plots histogram bars to indicate trend direction.
This indicator plots histogram bars which oscillate around its median, nul. Positieve balken geven een bullish trend bias, terwijl negatieve balken wijzen op een dalende trendbias.
Although its parameters can be modified to fit the trading style of the trader, it is naturally suited to indicate long-term trends.
Traders can use the shifting of the bars to positive or negative to indicate a possible trend reversal.
Traders can also use the indicator as trend direction filter to avoid taking trades that is going against the direction of the trend.
Handelsstrategie
Coppock Momentum Trend Forex Trading Strategy is a trend following strategy which is initiated by a momentum breakout scenario.
The Bollinger Bands indicator is used to identify the momentum breakout. A strong momentum candle should break out of the Bollinger Bands to indicate a momentum breakout. Price action should stay on the half of the Bollinger Bands where the breakout has occurred, indicating that it is respecting the middle line as a dynamic support or resistance.
The Exponential Moving Average Signals should also plot an arrow pointing the direction of the probable trend reversal.
dan, the Coppock bars should shift over zero indicating that the trend has shifted in the direction of the trend.
Indicatoren:
- Bollinger Bands (Standaardinstellingen)
- Exponentieel gemiddelde gemiddelde
- Sneller EMA: 25
- Langzamer EMA: 30
- Coppock
- R Period1: 36
Voorkeurstijdkaders: 30-Minuut, 1-uur- en 4-uursdiagrammen
Valutaparen: FX majors, minderjarigen en kruisen
Trading Sessions: Tokyo, Sessies in Londen en New York
Trade Setup kopen
Post
- A bullish momentum candle should break above the upper line of the Bollinger Bands.
- The Exponential Moving Averages Signals indicator should plot an arrow pointing up.
- The Coppock bars should shift above zero.
- Voer een kooporder in op de bevestiging van deze voorwaarden.
Stop Loss
- Stel de stop loss in op een steun onder de instapkaars.
Afsluiten
- Close the trade as soon as a candle closes below the lower Bollinger Bands line.
- Close the trade as soon as the Exponential Moving Averages Signals indicator plots an arrow pointing down.
Handelsinstellingen verkopen
Post
- A bearish momentum candle should break below the lower line of the Bollinger Bands.
- The Exponential Moving Averages Signals indicator should plot an arrow pointing down.
- The Coppock bars should shift below zero.
- Een verkooporder invoeren op de bevestiging van deze voorwaarden.
Stop Loss
- Stel de stop loss in op een weerstand boven de instapkaars.
Afsluiten
- Close the trade as soon as a candle closes above the upper Bollinger Bands line.
- Close the trade as soon as the Exponential Moving Averages Signals indicator plots an arrow pointing down.
Conclusie
This trading strategy could produce trade setups with the potential to produce high yielding trades. This is because momentum breakouts could often result in a trending market condition.
Echter, the breakout candle itself does not mean that a trend reversal is imminent. There are many conditions that should be met. It could be the shifting in the direction of price action swings and retests of dynamic supports or resistances.
This trading strategy systematically confirms the trend reversal based on a set of rules, which allows traders to automatically enter trades without second guessing themselves.
Forex Trading Strategies Installatie-instructies
Coppock Momentum Trend Forex Trading Strategy is a combination of Metatrader 4 (MT4 MT4) Indicator(S) en sjabloon.
De essentie van deze forex strategie is het transformeren van de geaccumuleerde geschiedenis gegevens en trading signalen.
Coppock Momentum Trend Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Op basis van deze informatie, handelaren kunnen verdere prijsbeweging aannemen en deze strategie dienovereenkomstig aanpassen.
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How to install Coppock Momentum Trend Forex Trading Strategy?
- Download Coppock Momentum Trend Forex Trading Strategy.zip
- *Kopieer mq4- en ex4-bestanden naar uw Metatrader Directory / Deskundigen / Indicatoren /
- TPL-bestand kopiëren (Sjabloon) naar uw Metatrader Directory / Sjablonen /
- Uw Metatrader-client starten of opnieuw starten
- Selecteer Grafiek en tijdschema waar u uw forex-strategie wilt testen
- Klik met de rechtermuisknop op uw handelsgrafiek en zweef op “Sjabloon”
- Move right to select Coppock Momentum Trend Forex Trading Strategy
- You will see Coppock Momentum Trend Forex Trading Strategy is available on your Chart
*Opmerking: Niet alle forex strategieën worden geleverd met mq4/ex4 bestanden. Sommige sjablonen zijn al geïntegreerd met de MT4 Indicators van het MetaTrader Platform.
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