One thing about the market that many traders don’t get right away is that it is dynamic. It has no rules. It is constantly changing. It never stops evolving. Because of these characteristics, no trader can impose his or her will on the market, except probably the biggest institutional traders from the big banks. We can set up all the rules and parameters that we want, but it would not always work. It may work 50%, 60%, 70% even 80% of the time, but it would never be absolutely perfect. That is just how the market works.
Knowing this, it is also wise to be looking at indicators that are dynamic. There are indicators that have fixed numbers or lines in which most rules would call for a trade when the indicator breaks that fixed number. This is especially true with oscillators. Take the trade when price reaches 80, 20, 100, zero, etc. However, although these numbers do somehow work, and it also does give order to a trading strategy, many times price would just do the opposite of what we are expecting whenever price reaches these levels, or at times make a very profitable move before the indicators reach these levels.
The Detrended Synthetic Price Oscillator
Table of Contents
- 1 The Detrended Synthetic Price Oscillator
- 2 DynamicRS_C
- 3 Trading Strategy Concept
- 4 Conclusion
The Detrended Synthetic Price Oscillator (DSP) is an oscillating indicator which is very dynamic in nature. It is unbounded, which means that the resulting figure could be drawn all over the place based on price movement as opposed to being kept in a fixed range. Although there are many indicators that have these characteristics, where the DSP shines is that its signal lines are dynamic. Most oscillating indicators generate signals as price crosses a certain fixed level. The DSP however, allows the trigger line to move around the mid-level along with the signal line. As these two lines crossover at a certain direction, whatever level it is, a signal is generated.
The DynamicRS_C indicator is a custom indicator that is based on a median of price. Although the mathematical basis for drawing its lines is not clearly discussed, it is one of those indicators that just seems to work. Although it is not perfect, but it works well as an additional confirmation for determining the short-term trends.
Trading Strategy Concept
The two custom indicators mentioned above are complimentary to each other. These indicators seem to agree with each other at some level, which yields to a high probability trade that could also yield high reward profits.
Before we get to the actual entry signals based on the above indicators, we will be filtering out trades that doesn’t agree with the intermediate-term trend. To do this, we will be using the 50-period Exponential Moving Average (EMA) as a basis for the intermediate trend. We will be looking at the location of price in relation to the 50 EMA and the slope of the 50 EMA.
As for the entries, we will be looking for a confluence of the Detrended Synthetic Price Oscillator and the DynamicRS_C. The DSP’s signals will be based on whether the signal line (solid line) breaks beyond the trigger line (dashed line), indicating that the market could start to trend at a certain direction. This particular indicator also changes color whenever the two indicators intersect, which conveniently shows the actual entry signal.
The DynamicRS_C indicator also determines the short-term trend. It does this by changing color as it changes direction. It paints an aqua colored line as the market becomes bullish and red line as the market becomes bearish.
- 50 EMA (green)
Timeframe: 15-min, 30-min, 1-hour, 4-hour and daily charts
Currency Pair: any
Trading Session: any
Buy (Long) Trade Setup
- Price should be above the 50 EMA
- The 50 EMA should be sloping up
- The DynamicRS_C indicator should change to color aqua
- The Detrended_Synthetic_Price_goscillators indicator’s solid line should break above the upper dashed line and change to color lime green
- Open a buy order at the confluence of the above rules
- Set the stop loss at the fractal below the entry candle
- Close the trade if the DynamicRS_C indicator changes to color red
- Close the trade if the Detrended_Synthetic_Price_goscillators’ solid line breaks below the upper dashed line and changes to color gray
Sell (Short) Trade Setup
- Price should be below the 50 EMA
- The 50 EMA should be sloping down
- The DynamicRS_C indicator should change to color red
- The Detrended_Synthetic_Price_goscillators indicator’s solid line should break below the lower dashed line and change to color orange red
- Open a sell order at the confluence of the above rules
- Set the stop loss at the fractal above the entry candle
- Close the trade if the DynamicRS_C indicator changes to color aqua
- Close the trade if the Detrended_Synthetic_Price_goscillators’ solid line breaks above the lower dashed line and changes to color gray
This strategy allows for a trend following strategy that agrees with the intermediate-term trend represented by the 50 EMA.
The confluence of the DynamicRS_C and Detrended_Synthetic_Price_goscillators allow for a high probability and high reward trade setup. Not all trade setups would be profitable but many of the trades opened based on this strategy could work. On top of this, there is a high chance that price could run for some time allowing for a reward-risk ratio of more the 2:1.
The key to this strategy is to use it during trending market conditions. This would not work well on a ranging market. To determine if the market is indeed trending, you may look at how sloped the 50 EMA is. The steeper the slope, the stronger the trend. The stronger the trend, the higher the probability of the trade.
Forex Trading Strategies Installation Instructions
Dynamic 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.
Dynamic 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.
Recommended Forex Metatrader 4 Trading Platform
XM MT4 Broker – Accept Global Clients (Excluding U.S Residents)
- Free $30 To Start Trading Instantly
- Deposit Bonus up to $5,000
- Unlimited Loyalty Program
- Awards-Winning Forex Broker
IG Market MT4 Broker – Accept Global Clients (Including U.S Residents)
- Trusted and Regulated
- World’s No.1 CFD Trading Provider
- Easy-to-Use Platforms
- USA’s best forex provider
How to install Dynamic Trend Forex Trading Strategy?
- Download Dynamic 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 Dynamic Trend Forex Trading Strategy
- You will see Dynamic 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: