Frama Average Envelopes Forex Trading Strategy

The Frama Average Envelopes forex trading strategy follows the trend with the help of the Envelopes indicator.

The strategy will give you buy and sell trading signals in the most profitable direction of the trend.

The core of the strategy is designed around the Envelopes and FRAMA indicator, which makes it possible to define the trend more accurately.

Chart Setup

MetaTrader4 Indicators: Envelopes.ex4 (Parameters Modified; Period=28, Shift=6, Colors Modified; Upper Band=None, Colors Width Modified; Lower band=2), FRAMA.ex4 (Inputs Variable Modified; PeriodFRAMA=21, Colors Width Modified; #0=2), fouraverage-indicator.ex4 (Inputs Variable Modified; PeriodFA=65)

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

Download the Frama Average Envelopes Forex Trading Strategy 

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy order if the following rules or conditions hold sway:

  1. If the red line of the Envelopes MT4 indicator intersects the dark blue line of the FRAMA custom indicator in a bottom up manner as seen on Fig. 1.0, price is said to be pushed higher i.e. a trigger to buy the stipulated fx pair.
  2. If the lime histograms above the 0.00 level & upward pointing arrow of the fouraverage-indicator gets placed within the indicator window and below price bars respectively (see Fig. 1.0), a buy signal is said to be looming.

Stop Loss for Buy Entry: Place stop loss 2-5 pips below trading support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes center stage:

  1. If the red line of the Envelopes MT4 indicator intersects the dark blue line of the FRAMA indicator top downward, it is an indication of an imminent bearish reversal, as such an exit or take profit will suffice.
  2. If the fouraverage-indicator display a red downward pointing arrow that is placed above the candlesticks and a red histogram below the 0.00 level as depicted on Fig. 1.0, it is a trigger to exit or take profit straightaway.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the red line of the Envelopes MT4 indicator cut across the dark blue line of the FRAMA custom indicator in a top downward fashion as illustrated on Fig. 1.1, price is said to be driven lower i.e. a trigger to sell the selected currency pair.
  2. If the red histograms below the 0.00 level & downward pointing arrow of the fouraverage-indicator gets placed within the indicator window and above the candlesticks respectively as depicted on Fig. 1.1, a sell signal is said to be imminent.

Stop Loss for Sell Entry: Place stop loss 2-5 pips above trading resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the red line of the Envelopes MT4 indicator intersects the dark blue line of the FRAMA indicator bottom up, it is an indication of a forthcoming bullish reversal, as such an exit or take profit will do.
  2. If the fouraverage-indicator display a lime upward pointing arrow that is placed below the candlesticks and a lime histogram (above the 0.00 level) as seen on Fig. 1.1, it is a trigger to exit or take profit straightaway.

Sell Trade Example

Fig. 1.1

Free Download

Download the Frama Average Envelopes Forex Trading Strategy

About The Trading Indicators

The Envelopes MT4 indicator is a trend indicator that is built after the moving averages and is also tagged a Moving Average Envelopes.

The Fractal Adaptive Moving Average abbreviated as FRAMA, is a technical tool for MetaTrader4 that was designed by John F Ehlers.

The FRAMA is a type of Adaptive Moving Average that deploys fractal geometry to dynamically fine-tune its smoothing period to fit the altering price action over a given time.

The fouraverage-indicator is a brand new forward-looking trend indicator designed by ExcStrategy team and it uses adaptive four-level averaging.

It is a quite powerful and efficient adaptive tool designed to fit into changing market conditions.

 

Share Now!