Zero Trend Forex Trading Strategy

The Zero Trend forex trading strategy follows the primary currency trend with the use of a few simple, yet effective trading indicators.

This strategy delivers good results for all kind of trading styles (scalping, day trading, swing trading).

Chart Setup

MetaTrader4 Indicators: EMA_Trend_Indicator.ex4 (Colors Modified; #0=None, #1=None, #2=None, Colors width Modified; #3=2), 45 SMA.ex4, EMAAngleZero.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

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy in the market if the following indicator or chart pattern gest displayed:

  1. If the red 45 SMA indicator line intersects the yellow EMA_Trend_Indicator line in a bottom up fashion as shown on Fig. 1.0, price is said to be taken higher i.e. a signal to go long on the designated fx pair.
  2. If the lime green histograms of the EMAAngleZero custom indicator gets aligned above the 0.00 level as described on Fig. 1.0, the overall market sentiment is said to be bullish, as such a buy alert is looming.

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:

  1. If while a bullish trend is ongoing, price closes below the red 45 SMA line (see Fig. 1.0), an exit or take profit is recommended.
  2. If the histograms of the EMAAngleZero custom indicator readjust to form a yellow one below the 0.00 level, it is a trigger to exit or take profit at once.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the red 45 SMA indicator line intersects the yellow EMA_Trend_Indicator line in a ttop downward manner as seen on Fig. 1.1, price is said to be pushed lower i.e. a signal to go short on the selected fx pair.
  2. If the yellow histograms of the EMAAngleZero custom indicator gets placed below the 0.00 level as depicted on Fig. 1.1, the overall market sentiment is said to be bearish, as such a sell alert is imminent.

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:

  1. If while a bearish trend is running, price closes above the red 45 SMA indicator line (check Fig. 1.1), an exit or take profit is advised.
  2. If the histograms of the EMAAngleZero custom indicator realign to form a lime green one above the 0.00 level, it is a trigger to exit or take profit without delay.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The EMA_Trend_Indicator.ex4 is a custom indicator that is built on two EMAs i.e. the Fast EMA 21 and Slow EMA 34, plotted on varying periods.

The EMAAngleZero.ex4 custom indicator is a filter that helps keeps traders away from sideways markets in the absence of any trend.

It deploys EMA 34 along with an angle threshold of 0.2 to aid spot sideways market.

A 45 SMA or 45 simple moving average is the forty five period sum of closing prices divided by forty five.

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