ForeX TechnicaL AnalysiS StrategieS
hiya guys
thought about starting a thread completly dedicated to t.a on forex
i have just started paper trading forex & would appreciate if seniors could leave their feedback OR share their technical analysis strategies if comfortable, so that beginners like me can gain an insight into forex world.
platform i have chosen is GCI MT4 which i found to be faster than other MT4' s like alpari, fxcentral etc. i tried demo from 5 vendors, GCI seems to be best.
here' s my strategy that i will be testing on forex, found on a website :
There are three Wilders Smoothing Moving Averages in it:
1- The dark green moving average is set to 9 (Slow)
2- The light green moving average is set to 6 (Middle)
3- The red moving average is set to 4 (Fast)
Also please note that these moving averages are applied to (H+L)/2 and not the close price only. This helps to have a better and smoother moving averages.
These three moving averages make an indicator with each other. This indicator is known as Alligator. It is a good indicator to find the trends and avoid the ranging market.
When Forex market is Bullish (the price is going up) the red moving average (the faster one) stays above the other two; the light green moving average stays at the middle and the dark green moving average (the slowest one) stays under the other two:
So when the red MA goes above the others it is time to take a long position and when the dark green MA goes above the others and the red MA goes under, it is time to close the long position or take a short position. As you can see in the above image, there are two Warning signals that the red MA tried to cross the other two MAs and it succeeded to cross the light green but failed to cross the dark green.
As you see in the Exit Point, the red MA is under the other MAs and the dark green MA is at the top.
This was a beautiful uptrend. But what about the time that the market is ranging?
When we have a flat market (ranging), the three MAs cross each other and also the price for so many times. Sometimes the red is at the top, sometimes the light green and sometimes the dark green. And if you look at the price candlesticks you will see that they are choppy and dont show a good and clear pattern.
If you have problem in distinguishing the flat/ranging market, adding a Heikin-Ashi chart can be a big help. The good thing about Heikin-Ashi is that when the market is Bullish or Bearish and we have good trends, the Heikin-Ashi candles have the same color and shapes. When the market is Bullish, all the Heikin-Ashi candles are green and have no lower shadow and when the market is Bearish, the Heikin-Ashi candles are red and have no upper shadow.
But what about the flat and ranging market? In the flat and ranging market red and green Heikin-Ashi candles will be mixed with each other. Also they will have upper and lower shadows mainly at the same time.
Please look at the below image carefully to understand the above explanations:
some more examples:
So when the Alligator and Heikin-Ashi candles tell you that the market is ranging, you have to stay away and wait for a trend.
guys, you are more than welcome to share your unique strategies which have worked for you OR we can keep on fine tuning on whatever we are working upon.
well, i am trying to fine tune this strategy as in looking at different time frames for it & found bigger time frames helpful but in case of bigger timeframes stop losses could be bigger as well. small timeframes gives smaller stoplosses & smaller profits & scalping is a bit difficult so far as prices shoots in either direction so fast..read somewhere to look for bigger time frames & take trade in smaller ones following trend of bigger time frames...not successful so far.
regards
rishi
hiya guys
thought about starting a thread completly dedicated to t.a on forex
i have just started paper trading forex & would appreciate if seniors could leave their feedback OR share their technical analysis strategies if comfortable, so that beginners like me can gain an insight into forex world.
platform i have chosen is GCI MT4 which i found to be faster than other MT4' s like alpari, fxcentral etc. i tried demo from 5 vendors, GCI seems to be best.
here' s my strategy that i will be testing on forex, found on a website :
There are three Wilders Smoothing Moving Averages in it:
1- The dark green moving average is set to 9 (Slow)
2- The light green moving average is set to 6 (Middle)
3- The red moving average is set to 4 (Fast)
Also please note that these moving averages are applied to (H+L)/2 and not the close price only. This helps to have a better and smoother moving averages.
These three moving averages make an indicator with each other. This indicator is known as Alligator. It is a good indicator to find the trends and avoid the ranging market.
When Forex market is Bullish (the price is going up) the red moving average (the faster one) stays above the other two; the light green moving average stays at the middle and the dark green moving average (the slowest one) stays under the other two:
So when the red MA goes above the others it is time to take a long position and when the dark green MA goes above the others and the red MA goes under, it is time to close the long position or take a short position. As you can see in the above image, there are two Warning signals that the red MA tried to cross the other two MAs and it succeeded to cross the light green but failed to cross the dark green.
As you see in the Exit Point, the red MA is under the other MAs and the dark green MA is at the top.
This was a beautiful uptrend. But what about the time that the market is ranging?
When we have a flat market (ranging), the three MAs cross each other and also the price for so many times. Sometimes the red is at the top, sometimes the light green and sometimes the dark green. And if you look at the price candlesticks you will see that they are choppy and dont show a good and clear pattern.
If you have problem in distinguishing the flat/ranging market, adding a Heikin-Ashi chart can be a big help. The good thing about Heikin-Ashi is that when the market is Bullish or Bearish and we have good trends, the Heikin-Ashi candles have the same color and shapes. When the market is Bullish, all the Heikin-Ashi candles are green and have no lower shadow and when the market is Bearish, the Heikin-Ashi candles are red and have no upper shadow.
But what about the flat and ranging market? In the flat and ranging market red and green Heikin-Ashi candles will be mixed with each other. Also they will have upper and lower shadows mainly at the same time.
Please look at the below image carefully to understand the above explanations:
some more examples:
So when the Alligator and Heikin-Ashi candles tell you that the market is ranging, you have to stay away and wait for a trend.
guys, you are more than welcome to share your unique strategies which have worked for you OR we can keep on fine tuning on whatever we are working upon.
well, i am trying to fine tune this strategy as in looking at different time frames for it & found bigger time frames helpful but in case of bigger timeframes stop losses could be bigger as well. small timeframes gives smaller stoplosses & smaller profits & scalping is a bit difficult so far as prices shoots in either direction so fast..read somewhere to look for bigger time frames & take trade in smaller ones following trend of bigger time frames...not successful so far.
regards
rishi
