The Laguerre Crossover Power forex strategy is a typical buy/sell strategy that buys dips in uptrends and sells rallies in downtrends.
It consists of two simple to understand trading indicators. See the chart setup and explanation below.
Chart Setup
MetaTrader4 Indicators: LWMA-Crossover_Signal.ex4 (Input Variable modified; FasterLWMA=14, SlowerLWMA=19), Laguerre RSI.ex4 (Input Variable modified; gamma=0.8)
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
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy order if the following indicator or chart pattern gets displayed:
- If the medium purple line of the Laguerre RSI custom indicator breaks above the 0.15 level as seen on Fig. 1.0, price is said to be pushed somewhat higher, hence an indication to buy the designated currency pair.
- If the spring green upward pointing arrow of the LWMA-Crossover_Signal.ex4 custom indicator is aligned somewhat below the candlestick as illustrated on Fig. 1.0, it is an indication of a looming bullish trend, as such a buy signal will suffice.
Stop Loss for Buy Entry: Place stop loss 5 pips below the green upward pointing arrow or below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If the medium purple line of the Laguerre RSI custom indicator falls below the 0.75 level as illustrated on Fig. 1.0, price is said to be losing steam on its bulls power, as such an exit or take profit is duly recommended.
- If during a buy signal a red downward pointing arrow of the LWMA-Crossover_Signal.ex4 custom indicator forms above price bars, we can say that the current bullish sentiment is weaning, hence an exit or take profit will suffice.
Sell Entry Rules
Initiate a sell entry if the following holds true:
- If the medium purple line of the Laguerre RSI custom indicator dips below the 0.75 level as seen on Fig. 1.1, price is said to be pushed somewhat lower, hence an indication to sell the specified currency pair.
- If the red downward pointing arrow of the LWMA-Crossover_Signal.ex4 custom indicator is aligned somewhat above the candlestick as seen on Fig. 1.1, it is an indication of an imminent bearish trend, as such a sell signal will do.
Stop Loss for Sell Entry: Place stop loss 5 pips above the red downward pointing arrow or above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following holds sway:
- If the medium purple line of the Laguerre RSI custom indicator spikes above the 0.15 level as shown on Fig. 1.1, price is said to be losing bearish momentum, as such an exit or take profit is duly advised.
- If during a sell alert a spring green upward pointing arrow of the LWMA-Crossover_Signal.ex4 custom indicator forms below price bars, we can say that the prevalent bearish sentiment is halting, hence an exit or take profit will suffice.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The LWMA-Crossover_Signal.ex4 is a weighted moving average that is computed by multiplying each one of the closing prices within the considered series, by a certain weight coefficient.
The Laguerre RSI is a custom oscillator indicator that is credited to David W. Thomas. It deploys the RSI to gauge oversold and overbought areas.