AMA Aroon Forex Trading Strategy

It is interesting to get on the market knowing you’ve got a trading strategy that’s got you covered.

The AMA Aroon forex trading strategy offers a simple and unique way for currency traders to look at price with a view to profitability and safety of funds.

Chart Setup

MetaTrader4 Indicators: AMA.ex4 (Inputs Variable Modified; periodAMA=18), Aroon_Oscillator_v1.ex4 (Inputs Variable Modified; AroonPeriod=15)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

Download

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicators or chart pattern gets displayed:

  1. If the deep sky blue dotted line of the AMA custom indicator gets aligned somewhat below price bars as shown on Fig. 1.0, price is said to be pressured to the upside i.e. a trigger to buy the currency of focus.
  2. If the green line and largely dodger blue histograms of the Aroon_Oscillator_v1 custom indicator breaks and stays above the 0.00 level as illustrated on Fig. 1.0, the sentiment in the market is said to be somewhat bullish i.e. a trigger to buy the designated currency pair.

Stop Loss for Buy Entry: Place stop loss 1 pip below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions are sustained:

  1. If during an ongoing buy signal the dotted line of the AMA custom indicator turns gold, it is an indication of more traders who are holding buy positions exiting their positions, hence an exit or take profit is advised.
  2. If the green line of the Aroon_Oscillator_v1 custom indicator eventually breaks below the 0.00 level during an ongoing buy signal, bulls power is said to be weaning, hence an exit or take profit is recommended.

Sell Entry Rules

Enter a sell order if the following holds precedence:

  1. If the gold dotted line of the AMA custom indicator gets aligned somewhat above the candlesticks as seen on Fig. 1.1, price is said to be pushed to the downside i.e. a trigger to sell the currency pair of interest.
  2. If the green line and largely red histograms of the Aroon_Oscillator_v1 custom indicator breaks and stays below the 0.00 level (refer to Fig. 1.1), the sentiment in the market is said to be somewhat bearish i.e. a trigger to sell the specified forex pair.

Stop Loss for Sell Entry: Place stop loss 1 pip above resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a sell alert is still on the dotted line of the AMA custom indicator turns deep sky blue, it is an indication of weaning bears power, as such an exit or take profit is duly recommended.
  2. If the green line of the Aroon_Oscillator_v1 custom indicator eventually breaks above the 0.00 level during an ongoing sell signal, bears power is said to be halting, hence an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Aroon_Oscillator_v1.ex4 custom indicator is built on the Aroon indicator and as such is a trend following indicator that defines the strength of a trend in focus and its likelihood to last.

It oscillates between -100 and 100, offering currency signals for all currency pairs and on all timeframes.

The AMA custom indicator is a trend following indicator that is built on the moving average.

Its dotted deep sky blue line represents a bullish trend, while the dotted gold line signals a bearish trend.

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