Stop and Reverse Trend Forex Trading Strategy

The Stop and Reverse Trend forex trading strategy is designed to enhance your trade entries, which in turn decreases your chances of getting stopped out of a big market move.

Evidently, you need such moves to get even in the market.

The Parabolic SAR and the Forex_Trend_Signalsv1 indicators gives the strategy an amazing market depth, allowing traders know where stop orders should be placed and when is right to go bullish/bearish.

Chart Setup

MetaTrader4 Indicators: Parabolic SAR.ex4 (Parameters Modified; Step=0.003, Color Width Modified; #2), Forex_Trend_Signalsv1.ex4 (Default Setting)

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

Download

Download the Stop and Reverse Trend Forex Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put on display:

  1. If the lime dotted line of the Parabolic SAR indicator aligns below the candlesticks as seen on Fig. 1.0, price is said to be driven higher i.e. a trigger to go long on the designated currency pair.
  2. If the lime and yellow vertical bars of the Forex_Trend_Signalsv1 indicator pops up within its window, buyers are said to be increasingly pushing price higher, as such a trigger to long is said to be looming.

Stop Loss for Buy Entry: Place stop loss below the rising Parabolic SAR dots.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes center stage:

  1. If a lime dot pops up somewhat above the candlesticks during a bullish trend, it is a signal to exit or take profit at once.
  2. If while price is surging higher a red bar forms within the Forex_Trend_Signalsv1 indicator window, bulls’ power is said to be weaning, as such an exit or take profit is advised.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the lime dotted line of the Parabolic SAR indicator aligns above the candlesticks as shown on Fig. 1.1, price is said to be pushed lower i.e. a trigger to go short on the selected fx pair.
  2. If the red and yellow bars of the Forex_Trend_Signalsv1 indicator pops up within its window, sellers are said to be increasingly pushing price lower, as such a sell trigger is said to be on the horizon.

Stop Loss for Sell Entry: Place stop loss above the falling Parabolic SAR dots.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If a lime dot pops up fairly below the candlesticks during a bearish trend, it is a signal to exit or take profit forthwith.
  2. If while price is surging lower (sell signal), a lime bar forms within the Forex_Trend_Signalsv1 indicator window, bears’ power is said to be halting i.e. an exit or take profit will do.

Sell Trade Example

Fig. 1.1

Free Download

Download the Stop and Reverse Trend Forex Trading Strategy

About The Trading Indicators

The Forex_Trend_Signalsv1 custom indicator is made up of two moving averages and the CCI MT4 indicator period set at 236.

The lime colored vertical bars within the chart window indicates a bullish trend, the red vertical indicates a bearish trend and the yellow bars shows range-bound trend.

The Parabolic SAR is a technical indicator that was created the renowned technician Welles Wilder, and is used by a lot of traders to gauge the direction of an asset’s momentum.

The indicator is depicted by series of dots that are placed either above or below an assets candlestick on its chart.

Share Now!