QQE Retracement Forex Trading Strategy

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QQE Retracement Forex Trading Strategy

Retracements are short term reversals of price on a longer-term trend. In a way, in a market condition with a rising price, retracements are the short-term dips, which could be considered a discount. On the flip side, in a market condition where price is falling, retracements are the short-term rise in price.

You would often hear traders and investors say, “buy on dips”. This is because there is wisdom in this thought. You would not want to sell on a bullishly trending market or buy on a bearishly trending one. You would want to go with the flow. Buy on a bullish trend and sell on a bearish trend. But you should also not be chasing on price. So, how do we buy on bullish trends and sell bearish trends? Trade on retracements. Trading on retracements is one of the most logical way to trade the market.

This strategy aims to trade retracements on a long-term trend using the QQE indicator.

Quantitative Qualitative Estimation

QQE or Quantitative Qualitative Estimation is a type of oscillating indicator. It is also based on the RSI or Relative Strength Index but has a rather more complicated mathematical formula. If you’d compare both, you would see that it does track the RSI quite well. Being that the standard RSI also tracks price action quite well, it is also noticeable that the QQE also tracks price action just as good.

One of the main differences between the two is that QQE tends to be a bit smoother as compared to the RSI, which on the other hand typically has a more jagged plotting. This makes the QQE less responsive to short-term oscillations and more suitable in tracking the mid-term trend, depending on the parameters used.

Trading Strategy Concept

The main idea behind this strategy is to trade the retracements based on a long-term trend.

To identify the long-term trend, we will be using the 200 period Exponential Moving Average (EMA). This is a commonly used measure of the long-term trend. We would identify the trend based on the location of price in relation to the 200 EMA and trade to the direction it indicates.

As for the retracement, we will be using the 50 EMA, a commonly used measure for the medium-term trend. We will be waiting for price to retrace back to the 50 EMA before we wait for the actual trigger to enter the market.

Lastly, as for our trigger, we would be using the QQE indicator. Whenever price retraces back to the 50 EMA, the QQE typically crosses back to its midline. We will then wait for the QQE to cross over the midline once again signifying a resumption of the trend.

Indicators:

  • 200 EMA (brown)
  • 50 EMA (gold)
  • QQE

Timeframe: 15-minute, 1-hour, 4-hour and daily charts

Currency Pair: any

Trading Session: any

Buy (Long) Trade Setup

Entry

  • The 50 EMA should be above the 200 EMA
  • Price should be above the 200 EMA
  • Wait for price to retrace below the 50 EMA
  • Wait for the QQE to cross below the midline
  • Wait for the QQE to cross back above the midline
  • Wait for price to cross back above the 50 EMA
  • Enter a buy order on the confluence of the above rules

Stop Loss

  • Set the stop loss at the support below the entry candle

Take Profit

  • Set the take profit target at 1.5x the risk on the stop loss

Sell (Short) Trade Setup

Entry

  • The 50 EMA should be below the 200 EMA
  • Price should be below the 200 EMA
  • Wait for price to retrace above the 50 EMA
  • Wait for the QQE to cross above the midline
  • Wait for the QQE to cross back below the midline
  • Wait for price to cross back below the 50 EMA
  • Enter a sell order on the confluence of the above rules

Stop Loss

  • Set the stop loss at the resistance above the entry candle

Take Profit

  • Set the take profit target at 1.5x the risk on the stop loss

Conclusion

This is a viable strategy that could earn some profit. This strategy is best used during a trending market condition. However, during choppy market conditions, this might incur some losses.

It would also be best to learn price action as setups that agree with price action are the ones that typically has a better chance of making profit.


Forex Trading Systems Installation Instructions

QQE Retracement Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex system is to transform the accumulated history data and trading signals.

QQE Retracement 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 system accordingly.

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How to install QQE Retracement Forex Trading Strategy?

  • Download QQE Retracement 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 system
  • Right click on your trading chart and hover on “Template”
  • Move right to select QQE Retracement Forex Trading Strategy
  • You will see QQE Retracement 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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