Aroon Qbands Forex Trading Strategy

The Aroon Qbands forex trading strategy is designed to trade with the overall currency trend, with the help of the Aroon indicator. It gets you into the market during suitable market conditions.

Chart Setup

MetaTrader4 Indicators: Quantile_bands_1.3.ex4 (Default Setting), Aroon.ex4 (inputs Variable Modified; AroonPeriod=42)

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

Recommended Trading Sessions: Any (London, New York, Tokyo)

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy order if the following indicator or chart pattern gets put on display:

  1. If the middle line of the Quantile_bands_1.3 custom indicator line turns lime green as depicted on Fig. 1.0, price is said to be pushed higher i.e. a trigger to buy the designated currency pair.
  2. If the dodger blue line of the Aroon indicator break and hover above the red line as shown on Fig. 1.0, it is an indication of bullish pressures, as such a trigger to go long on the stipulated forex pair will suffice.

Stop Loss for Buy Entry: Place stop loss 3 pips below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If the middle line of the Quantile_bands_1.3 custom indicator line turns silver while a buy order is ongoing, it is pointing to a possible bearish reversal, as such an exit or take profit is recommended.
  2. If the dodger blue line of the Aroon indicator intersect the red line during a buy signal, it is a trigger to exit or take profit at once.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the middle line of the Quantile_bands_1.3 custom indicator line turns sandy brown as illustrated on Fig. 1.1, price is said to be driven lower i.e. a trigger to sell the selected forex pair.
  2. If the red line of the Aroon indicator break and hover above the dodger blue line as seen on Fig. 1.1, it is an indication of bearish pressures, as such a trigger to go short on the currency pair of focus.

Stop Loss for Sell Entry: Place stop loss 3 pips above resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes to the fore:

  1. If the middle line of the Quantile_bands_1.3 custom indicator line turns silver during a sell order (see Fig. 1.1), it is pointing to a possible bullish reversal, as such an exit or take profit is advised.
  2. If the red line of the Aroon indicator intersect the dodger blue line during a sell alert, it is a trigger to exit or take profit immediately.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Quantile_bands_1.3 is similar to the Bollinger Band indicator but its middle line is a combination of the two outer quantiles.

If both outer quantiles are showing the same trend i.e. color, those of the middle quantile is same as those of the other quantiles, else it is undetermined i.e. silver if you deploy the default settings.

The Aroon custom indicator is basically used in defining the overall trend bias.

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