FA Filter Envelope Forex Trading Strategy

The FA Filter Envelope forex trading strategy is designed to churn out stable profitable trades with the help of buy and sell trade setups that are easy to spot.

Learn how it works below:

Chart Setup

MetaTrader4 Indicators: kijun_sen_and_envelope.ex4 (Inputs Variable Modified; Kijun Sen Period=24, Evelope Deviation=100), Kalman_filter.ex4 (Default Settings), FA.ex4 (Inputs Variable Modified; PeriodFA=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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Download the FA Filter Envelope Forex Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

  1. If the lime upward pointing arrow of the FA custom indicator gets placed below price bars, within the activity window, price is said to be bullish. A corresponding lime histograms that are aligned above the 0.00 level, signifies a bullish trend.
  2. If the dodger blue line of the kijun_sen_and_envelope.ex4 custom indicator intersects the orange line of the Kalman_filter.ex4 custom indicator in a bottom up manner, the overall market sentiment is said to be bullish, i.e. a signal to buy the specified forex pair.

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

Exit Strategy/Take Profit for Buy Entry

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

  1. If a red downward pointing arrow of the FA custom indicator pops up during a buy alert or if a red histogram forms below the 0.00 level, it is a trigger to exit or take profit at once.
  2. If the dodger blue line of the kijun_sen_and_envelope.ex4 custom indicator intersects the orange line of the Kalman_filter.ex4 custom indicator to go above it during a bullish signal, it is indicative of probable bearish reversal i.e. a trigger to exit or take profit immediately.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the red downward pointing arrow of the FA custom indicator gets placed above price bars, within the activity window, price is said to be bearish. A corresponding red histograms that are aligned below the 0.00 level, depicts a bearish trend.
  2. If the dodger blue line of the kijun_sen_and_envelope.ex4 custom indicator intersects the orange line of the Kalman_filter.ex4 custom indicator in a top downward fashion, the general market sentiment is said to be bearish, i.e. a signal to sell the designated currency pair.

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

Exit Strategy/Take Profit for Sell Entry

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

  1. If a lime upward pointing arrow of the FA custom indicator pops up while a bears market is on or if a lime histogram forms above the 0.00 level, it is a trigger to exit or take profit at once.
  2. If the dodger blue line of the kijun_sen_and_envelope.ex4 custom indicator intersects the orange line of the Kalman_filter.ex4 custom indicator to go under it during a bearish signal, it is suggestive of likely bullish reversal i.e. a trigger to exit or take profit forthwith.

Sell Trade Example

Fig. 1.1

Free Download

Download the FA Filter Envelope Forex Trading Strategy

About The Trading Indicators

The Kijun_sen_and_envelope.ex4 custom indicator is an important member of the Ichimoku Kinko Hyo indicator family and can be used to measure medium-term momentum.

The kalman_filter.ex4 custom indicator is a moving average indicator that helps is smoothening price action.

The FA custom indicator is made up four important moving averages i.e. the SMA 200, SMA 21, SMA 114 and SMA 83.

It combines arrows (red and lime), along with histograms (red and lime) in reporting sell and buy signals respectively.

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