Price Oscillator Bands Forex Trading Strategy

Trend following strategies remain one of the best options for long-term profits in the forex market.

We have tailored the Price Bands Oscillator forex trading strategy in light of this to aid you capture the right market move in the trend.

Chart Setup

MetaTrader4 Indicators: Quantile_bands_1.3.ex4 (Default setting), PPO.ex4 (Inputs Variable Modified; FastEMA=24, SlowEMA=52)

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 put on display:

  1. If the middle line of the Quantile_bands_1.3 custom MT4 indicator turns lime green as seen on Fig. 1.0, the prevalent market sentiment is said to be bullish, hence a trigger to buy the designated forex pair.
  2. If the solid sky blue line of the PPO custom indicator break and hovers above the 0.00 level as shown on Fig. 1.0, a buy signal is said to be in the cards.

Stop Loss for Buy Entry: Place stop loss 2-5 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

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

  1. If while a buy signal is running, the middle line of the Quantile_bands_1.3 custom indicator turns sandy brown as depicted on Fig. 1.0, an exit or take profit is advised.
  2. If the solid sky blue line of the PPO custom MT4 indicator dips below the 0.00 level during a bullish trend, it is an indication of weaning bulls power i.e. an exit or take profit will suffice.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the middle line of the Quantile_bands_1.3 custom MT4 indicator turns sandy brown as illustrated on Fig. 1.1, the dominant market sentiment is said to be bearish, hence a prompt to sell the selected fx pair.
  2. If the solid sky blue line of the PPO custom indicator break and stays below the 0.00 level as depicted on Fig. 1.1, a sell signal is said to be on the horizon.

Stop Loss for Sell Entry: Place stop loss 2-5 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a sell signal is being held, the middle line of the Quantile_bands_1.3 custom indicator turns lime green as illustrated on Fig. 1.1, an exit or take profit is recommended.
  2. If the solid sky blue line of the PPO custom MT4 indicator jumps above the 0.00 level during a bears market, it is a warning of increasing bulls in the market, hence an exit or take profit will do.

Sell Trade Example

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About The Trading Indicators

The Percentage Price Oscillator (PPO) is a momentum indicator that gauges the difference between two moving averages as a percentage of the bigger moving average.

The PPO has standard settings that are similar to those of the MACD: 12, 26, and 9.

The Quantile_bands_1.3 is a custom indicator that is designed to take after the Bollinger Band, here its middle line is a combination of the two outer quantiles.

If both outer quantiles are showing the same trend i.e. color, those of the middle quantile is same as those of the other quantiles, else it is undetermined i.e. silver if you deploy the default settings.