Narrow Range Forex Trading Strategy

A powerful forex trading strategy must be able to track the currency market with a good degree of correctness.

The Narrow Range forex trading strategy provides accurate trading signals on any currency pair of your choice.

It has its core around price action trading that is centered on the current sessions range (high to low price) that must be narrower than the previous 3 sessions.

Chart Setup

MetaTrader4 Indicators: Kijun Tenkant.ex4 (Input Variable modified; Tenkan=8, Kijun=28), i-Friday_Sig.ex4 (default settings)

Preferred Time Frame(s): Any

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 Narrow Range 4 pattern forms on the activity chart around a support level (lime horizontal line), where the range of candle #4 is narrower than the previous three sessions (depicted by candles 1, 2 & 3), we place a buy stop pending order 5 pips above the high of the Narrow Range 4 bar and wait for a breakout. Once it is triggered, a buy entry is initiated.
  2. If the blue line of the Kijun Tenkant custom indicator crosses its red line bottom up as seen on Fig. 1.0, with price trading somewhat above the lines, it is a trigger to buy the designated currency pair.
  3. If the blue upward pointing arrow of the i-Friday_Sig.ex4 custom indicator pops up somewhat below the price bars, a buy order is recommended.

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

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions take precedence:

  1. If the blue line of the Kijun Tenkant custom indicator crosses its red line top downward while the bullish signal is running, it is an indication of weaning bulls power, hence an exit or take profit is advised.
  2. If the salmon downward pointing arrow of the i-Friday_Sig.ex4 custom indicator shows up during an ongoing bulls market, it is a signal that buyers are leaving the market, hence an exit or take profit is advised.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the Narrow Range 4 pattern forms on the activity chart around a resistance level (lime horizontal line), where the range of candle #4 is narrower than the previous three sessions (depicted by candles 1, 2 & 3), we place a sell stop pending order 5 pips below the low of the Narrow Range 4 bar and wait for a breakout. Once it is triggered, a sell entry is initiated.
  2. If the blue line of the Kijun Tenkant custom indicator crosses its red line top downward as seen on Fig. 1.1, with price trading somewhat below the lines, it is a trigger to sell the currency pair of interest.
  3. If the salmon downward pointing arrow of the i-Friday_Sig.ex4 custom indicator pops up somewhat above the price bars, a sell order is recommended.

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

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the blue line of the Kijun Tenkant custom indicator crosses its red line bottom up during an ongoing bears market, it is a pointer towards weaning bears power, hence an exit or take profit is advised.
  2. If the blue upward pointing arrow of the i-Friday_Sig.ex4 custom indicator shows up during an ongoing bears market, it is a signal that sellers are leaving the market, hence an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Kijun Tenkant.ex4 is a forex indicator that is a component of the Ichimoko Kinko Hyo indicator and finds its use as a metric for medium-term momentum.

The i-Friday_Sig.ex4 custom indicator is a trend following indicator that plots blue/salmon upward/downward pointing arrows on the activity chart to define trend direction.

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