Sometimes trading success comes from the non-complex stuffs that we adopt when trading currencies online.
One of such is the Inverse Momentum forex trading strategy that allows us gain insight into price action along with its always changing path.
Let’s look at a simple trading strategy that we’ve designed to aid all types of investors do better at trading forex online.
Chart Setup
MetaTrader4 Indicators: 0_IndInverse.ex4 (Default Setting), 100pips Momentum_BO.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
Download
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy order if the following indicator or chart setup gets put on display:
- If the red line of the 100pips Momentum_BO.ex4 custom indicator crosses its blue line bottom up, price is said to be pushed to the upside i.e. a trigger to go long on the pair of interest.
- If the green upward pointing arrow of the 0_IndInverse custom indicator is seen on the indicator’s marron line within its window, it is a signal to go bullish on the fx pair of interest.
Stop Loss for Buy Entry: Place stop loss 3 pips below short-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If during a bullish signal, the red line of the 100pips Momentum_BO.ex4 custom indicator intersects with its blue line as shown on Fig. 1.0, an exit or take profit should be duly considered.
- If the red downward pointing arrow of the 0_IndInverse custom indicator gets aligned on its marron line (within its indicator window), while a buy signal is ongoing, bulls power is said to be weaning and on that note an exit or take profit will suffice.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the red line of the 100pips Momentum_BO.ex4 custom indicator crosses its blue line in a top downward fashion, the market sentiment is said to be bearish i.e. a trigger to go short on the pair of focus.
- If the red downward pointing arrow of the 0_IndInverse custom indicator is seen on the indicator’s marron line within its window, it is a signal to sell the designated currency pair.
Stop Loss for Sell Entry: Place stop loss 3 pips above short-term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If during a sell signal, the red line of the 100pips Momentum_BO.ex4 custom indicator crosses the blue line bottom up as seen on Fig. 1.1, an exit or take profit is advised.
- If the green upward pointing arrow of the 0_IndInverse custom indicator gets aligned on its marron line (within its indicator window), while a sell signal is running, bears power is said to be halting as such an exit or take profit will do.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The 0_IndInverse custom indicator is a momentum indicator that traders can use to measure the strength of the market.
The 100pips Momentum_BO.ex4 is a custom MT4 indicator that delivers bullish and bearish entry signals.
This is as a result of the indicator’s composition i.e. being made up of four technical studies with the ATR volatility indicator included.