To study price action, it is expedient to implement a technical analysis framework that is able to look at historical price movement and define the present trading conditions and impending price movement.
A lot of information is being reflected in price movement.
The Awesome Oscillator forex trading strategy uses the awesome oscillator (AO) together with the Ichimoku trend indicator to study price movement in any currency pair.
MetaTrader4 Indicators: Ichimoku.ex4 (Default Setting), Awesome Oscillator.ex4 (Default Setting)
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 (majors, cross pairs, exotics)
Buy Trade Example
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If price is seen to develop above the predominantly sandy brown cloud of the Ichimoku custom indicator as seen on Fig. 1.0, price is said to be pushed higher i.e. a signal to buy the designated currency pair.
- If the vertical bars (green & red) of the Awesome Oscillator gets placed above the 0.00 level as shown on Fig. 1.0, the sentiment in the market is said to be bullish i.e. a signal to buy the selected forex pair.
Stop Loss for Buy Entry: Place stop loss below immediate support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a buy signal is ongoing, price closes below the cloud of the Ichimoku custom indicator, bulls are said to be exiting their position(s), hence an exit or take profit is advised.
- If the vertical bars (green or red) of the Awesome Oscillator readjust to form below the 0.00 level during a buy signal, market participants are advised to exit or take profit on open orders.
Sell Entry Rules
Enter a sell order if the following holds true:
- If price is seen to form below the predominantly thistle cloud of the Ichimoku custom indicator as illustrated on Fig. 1.1, price is said to be taken lower i.e. a signal to sell the designated forex pair.
- If the vertical bars (red & green) of the Awesome Oscillator gets placed below the 0.00 level as seen on Fig. 1.1, the overall market sentiment is said to be bearish i.e. a trigger to sell the designated currency pair.
Stop Loss for Sell Entry: Place stop loss above immediate resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If while a sell signal is running, price closes above the cloud of the Ichimoku custom indicator, bears are said to be exiting their position(s), hence an exit or take profit is recommended.
- If the vertical bars (green or red) of the Awesome Oscillator readjust to form above the 0.00 level during a sell signal (refer to Fig. 1.1), traders are advised to exit or take profit on open positions.
Sell Trade Example
About The Trading Indicators
Ichimoku is a technical or chart indicator that is also a trend trading system.
The creator of the indicator, Goichi Hosada, introduced Ichimoku as a “one glance” indicator.
In a few seconds you are able to decide whether a tradable trend is present or if you should wait for a better set-up on a specific pair.
The Awesome Oscillator is an indicator used to gauge market momentum.
The AO computes the difference of a 34 Period and 5 Period Simple Moving Averages.
AO is normally deployed to confirm trends or to anticipate likely reversals.