Holt Smoothing ADX Forex trading Strategy
The Holt Smoothing ADX forex trading strategy is a trend following trading technique that works on higher and also lower time frames.
The indicators deployed are the Holt_double_exponential_smoothing_v2.2, a trend seeking indicator and the ADXdon, a modified ADX technical study that also searches for market trends.
The subsequent examples will further reveal how just about anyone can adopt this strategy.
MetaTrader4 Indicators: Holt_double_exponential_smoothing_v2.2.ex4 (Inputs Variable Modified; Estimate period=27.33), ADXdon.ex4 (Inputs Variable Modified; ADXPeriod=28, DiPlusPeriod=38, DiMinusPeriod=48, Colors Modified; #0=None)
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
Buy Trade Example
Long Entry Rules
Enter a buy order if the following rules or conditions hold sway:
- If the lime green line of the Holt_double_exponential_smoothing_v2.2 custom indicator gets aligned somewhat below price bars as shown on Fig. 1.0, price is said to be taken to the upside i.e. a trigger to go long on the designated forex pair.
- If the red line of the ADXdon custom indicator break and stay above the blue line, while also hovering above the 20.00 level (see Fig. 1.0), a buy alert is said to be looming.
Stop Loss for Buy Entry: Place stop loss below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes center stage:
- If the line of the Holt_double_exponential_smoothing_v2.2 custom indicator turns orange while a buy signal is running, an exit or take profit is advised.
- If the red line of the ADXdon custom indicator dips below the blue line during a buy trend, an exit or take profit is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the orange line of the Holt_double_exponential_smoothing_v2.2 custom indicator gets aligned slightly above price bars as seen on Fig. 1.1, price is said to be driven lower i.e. a trigger to sell the selected currency pair.
- If the red line of the ADXdon custom indicator dips and stay below the blue line, while also hovering below the 20.00 level as illustrated on Fig. 1.1, a sell signal is said to be on the horizon.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the line of the Holt_double_exponential_smoothing_v2.2 custom indicator turns lime green while a sell signal is ongoing, an exit or take profit will suffice.
- If the red line of the ADXdon custom indicator surges above the blue line during a bearish trend, an exit or take profit is advised.
Sell Trade Example
About The Trading Indicators
The Holt_double_exponential_smoothing_2.2.ex4 is a trend following indicator that is essentially used for forecasting but not as an average. It uses linear forecasting in carrying out its forecasting method.
The ADXdon.ex4 custom indicator is an enhanced version of the ADX indicator and it aids investor’s trader in the direction of a strong trend, thus ramping up the potential for profit.
Generally, the ADXdon indicator is used to determine when price is in a strong trend.