Reversal 2 Forex Candlestick Strategy
Table of Contents
This is another candlestick system.
Set up a 15 minute chart on GJ and change to candlestick.
- Parabolic SAR, default settings;
- 5 LWMA (close price); this is the signal line
- Add 20 LWMA (close price);
- Add RSI (5); add levels 10, 20, 70, 80
- Candelstick Pattern
Two conditions to enter:
1) As a general rule, enter a trade when RSI is between:
- 70 and 80, but preferably above 80 if I go short, and
- 20 and 10 but preferably below 10 when going long.
2) Look at the candles pattern and enter only if you see a trend reversal pattern.
- enter if BOTH 1) and 2) are present at the same time.
- Refer 5 and 20 LWMA and parabolic SAR to exit positions.
- There are 3 indicators for a bit more accurate targeting that can be used for short entry/exit: 5 and 20 LWMA, and parabolic SAR.
- After you open a trade, you should look for EITHER 5 OR 20 LWMA line, whichever is first (usually, 20 MA is your first target,
but there are situations when SAR is between these 2 MAs.
- The next target after 5 and 20 MAs cross is parabolic SAR
- (but sometimes 20 LWMA).
Tips & Tricks:
- Candlesticks and RSI are the most crucial indicators. RSI is used for advanced warning system next to candlestick. RSI (5) is the fastest signal and will signal reversal way before anything is visible on any other indicator.
- As you gain experience reading the RSI you may decide to take certain “risks” and enter earlier while the RSI is not in optimal position.
- The RSI (5) on the 15 min timeframe has a range of about 100-125 pips, no matter when you enter, you will know when to get out of the trade..
- The range of the RSI (5) on 5 min timeframe is between 35-40 pips no matter where you enter, but more like 35). So if an optimal entry on 15 min is missed, then a shorter timeframe can be used for taking a profit less than 100 pips.
- If you know to read candles then you can go ahead before the RSI gives it signal. You can use Japanese Candlesticks Charting techniques by Steve Nison for reference.
- Use MTF_RSI (5) and MTF_PSAR for 30 min on my actual 15 min chart.
- Trade may end if you get signals from 2 different timeframes.
- Be careful with RSI divergences.
- Do not trade the news unless you REALLY know what you’re doing. Close the trade if it happens.
- Avoid going against the trend; for instance, if the trend is up and RSI is between 70 and 80, you will be tempted to enter a short. Well, don’t, UNLESS candlestick configuration really suggests that. You’ll see that in most cases, RSI will drop somewhere around 50 (while price will stay almost the same!) and then will go up again.
Forex Trading Strategies Installation Instructions
Reversal 2 Forex Candlestick 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.
Reversal 2 Forex Candlestick 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 Reversal 2 Forex Candlestick Strategy?
- Download Reversal 2 Forex Candlestick 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 Reversal 2 Forex Candlestick Strategy
- You will see Reversal 2 Forex Candlestick 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: