There are times in the market where we find major currency moves resulting to losses for most traders.
This is seen in the absence of a well-thought-out trading strategy, an ingredient that must not be left out if you want to remain profitable in the currency trading markets.
The Stop v3 Envelopes forex trading strategy is designed to give you an idea of where you are in the market and how to get to your preferred destination i.e. take profit.
This approach is adopted to position the currency trader for equity growth.
The added indicators ensures that trends are caught just in time (using the CandleStop and Envelopes indicators) and traders are able to exit at the right price levels (using the BvS v3 alerts).
Chart Setup
MetaTrader4 Indicators: CandleStop.ex4 (Inputs Variable Modified; TrailPeriods=5), Envelopes.ex4 (Parameters Modified; Period=28, Shift=6), BvS v3.ex4 (Inputs Variable Modified; BvSPeriod=30)
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 (majors, cross pairs,..)
Download
Download the Stop v3 Envelopes 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:
- If the blue line of the Envelopes MT4 indicator intersect the magenta dotted line of the CandleStop custom indicator in a bottom up manner as seen on Fig. 1.0, with price trading somewhat above, a buy signal is said to be in place.
- If the BvS v3 custom indicator forms lime vertical lines within its indicator window as seen on Fig. 1.0, price is said to be pushed higher i.e. a signal to buy the designated fx pair.
Stop Loss for Buy Entry: Place stop loss below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes center stage:
- If price closes below the red line of Envelopes MT4 indicator as depicted on Fig. 1.0, an exit or take profit is advised.
- If while a buy signal is ongoing, the BvS v3 custom indicator displays a red vertical line, an exit or take profit is duly recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the Envelopes MT4 indicator intersect the magenta dotted line of the CandleStop custom indicator in a top downward fashion (refer to Fig. 1.1), with price trading slightly below, a sell alert is said to be in the making.
- If the BvS v3 custom indicator displays red vertical lines within its indicator window as illustrated on Fig. 1.1, price is said to be taken lower i.e. a signal to sell the selected currency pair.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If price closes above the blue line of Envelopes MT4 indicator as shown on Fig. 1.1, an exit or take profit will suffice.
- If while a sell alert is running, a lime vertical line pops up within the BvS v3 custom indicator window, an exit or take profit is duly advised.
Sell Trade Example
Fig. 1.1
Free Download
Download the Stop v3 Envelopes Forex Trading Strategy
About The Trading Indicators
The CandleStop is a chart pattern indicator that is comprised of two dotted lines channel (magenta and lime colored dotted lines).
Price is said to be bullish when it is above the magenta dotted line and bearish when it is below the lime dotted line.
The Envelopes MT4 indicator is a trend indicator that is built after the moving averages and is also tagged a Moving Average Envelopes.
The BvS v3 custom indicator is known as the Buyers versus Sellers indicator and is used to literally gauge buyers versus sellers in the market.
It is a good pointer to where the future price is heading to (up or down).