Linear Level Forex Trading Strategy

In dealing with the complexities of the forex market, one has to come up with a strategy that quickly reacts to changing trends.

The Linear Level forex trading strategy is trend following and quickly reacts to changing trends.

This strategy provides traders with great buy and sell signals for any currency pair and can be applied to all timeframe’s.

Learn the rules below to use this strategy in both uptrends (buy signals) and downtrends (sell signals):

Chart Setup

MetaTrader4 Indicators: i_daystochastic_v1_1.ex4 (Input Variable modified; D Period=9, Slowing=9), IDWma.ex4 (Input Variable modified; MA_Period=20), Linear_regression_Line.ex4 (default settings)

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

Initiate a buy entry if the following indicator or chart pattern gets displayed:

  1. If the red line of the IDWma.ex4 custom indicator crosses the blue line of the Linear_regression_Line.ex4 custom indicator bottom up as shown on Fig. 1.0, price is said to be pushed somewhat higher i.e. a signal to buy the designated forex pair.
  2. If the blue line of the i_daystochastic_v1_1 custom indicator break and hovers above the 0.00 signal level as illustrated on Fig. 1.0, it is an indication of bullish sentiment i.e. a buy alert.

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 center stage:

  1. If the red line of the IDWma.ex4 custom indicator crosses the blue line of the Linear_regression_Line.ex4 custom indicator top downwards, it is pointing to dwindling bulls pressures, hence an exit or take profit will suffice.
  2. If the blue line of the i_daystochastic_v1_1 custom indicator break below the 0.00 level during a bullish signal, it is an indication that more buyers are exiting the market, hence an exit or take profit is advised.

Sell Entry Rules

Initiate a sell entry if the following holds true:

  1. If the red line of the IDWma.ex4 custom indicator crosses the blue line of the Linear_regression_Line.ex4 custom indicator top downward as seen on Fig. 1.1, price is said to be pushed somewhat lower i.e. a signal to sell the specified forex pair.
  2. If the blue line of the i_daystochastic_v1_1.ex4 custom indicator break and hovers below the 0.00 signal level as depicted on Fig. 1.1, it is an indication of bearish market sentiment i.e. a sell alert.

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 holds sway:

  1. If the red line of the IDWma.ex4 custom indicator crosses the blue line of the Linear_regression_Line.ex4 custom indicator bottom up, it is pointing to halting bear pressures, hence an exit or take profit will do.
  2. If the blue line of the i_daystochastic_v1_1 custom indicator break above the 0.00 level during a bearish signal, it is an indication that sellers are increasingly leaving the market, hence an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The Inverse Distance Weighted Moving Average (IDWma) is a custom indicator that is most sensitive to price moves and has its MA period set at a default of 14.

The Linear_Regression_Line.ex4 custom indicator is primarily used in determining the direction of a trend. The indicator essentially measures the line of best fit for a price series.

The i_daystochastic_v1_1.ex4 custom indicator is a stochastic indicator, in which the indicator period is calculated automatically using the number of bars of the current day.

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