The Retracement Finder forex trading strategy is designed to offer traders a more realistic approach to trading retracements.
The strategy does make provisions that allows traders trade along with the prevalent market trend.
Chart Setup
MetaTrader4 Indicators: Retracement Finder.ex4 (default settings), MATradingSignals.ex4 (Input Variable modififed: FastMA_Period=7, SlowMA_Period=10)
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
Place a buy entry if the following indicator or chart pattern gets displayed:
- If the lime green upward pointing arrow of the MATradingSignals.ex4 custom indicator forms below price bars as seen in Fig. 1.0, the prevalent market sentiment is said to be bullish i.e. a trigger to go long on the pair of interest.
- If the blue vertical bars of the Retracement Finder custom indicator aligns above the 0.00 level, the market is said to be pushing price to the upside i.e. a buy signal.
Stop Loss for Buy Entry: Place stop loss 2 pips below immediate support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions holds sway:
- If a red downward pointing arrow of the MATradingSignals.ex4 custom indicator forms above price bars during an ongoing buy signal (refer to Fig. 1.0), price is said to be taking a somewhat dive, hence an exit or take profit is advised.
- If the yellow vertical bar of the Retracement Finder custom indicator forms below the 0.00 level, it is an indication that price is on its way down, as such an exit or take profit will suffice.
Sell Entry Rules
Place a sell order if the following gets exhibited on the price chart:
- If the red downward pointing arrow of the MATradingSignals.ex4 custom indicator aligns above the candlesticks as shown in Fig. 1.1, a bearish trend is said to be on the horizon i.e. a trigger to go short on the asset of focus.
- If the yellow/red vertical bars of the Retracement Finder custom indicator aligns below the 0.00 level, the market is said to be pushing price lower i.e. a sell signal.
Stop Loss for Sell Entry: Place stop loss 2 pips above immediate resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If a lime green upward pointing arrow of the MATradingSignals.ex4 custom indicator forms below the candlesticks during a bearish signal as shown on Fig. 1.1, price is said to be surging, hence an exit or take profit is advised.
- If the yellow vertical bar of the Retracement Finder custom indicator forms above the 0.00 level, it is an indication that price is on its way up, as such an exit or take profit will be sufficient.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The MATradingSignals.ex4 is a moving average indicator that sets its fast MA period and slow MA period at 6 and 8 respectively.
It deploys a lime green upward pointing arrow and red downward pointing arrow to depict buy and sell signals respectively.
The Retracement Finder custom indicator is a technical tool that scans the market for some sort of retracement in the general price trend.