I-Trend Forex Sentiment Strategy - Boom Crash Index - MT5 Indicators

I-Trend Forex Sentiment Strategy - Boom Crash Index - MT5 Indicators

Ravi Ranjan    October 18, 2022   

 

📊👉🏽 I-Trend_Forex Sentiment Strategy Based on Three Main MT5 Indicators. 

🧩👉🏽iTrend FX_vma Signal Alert Indicator:- Signals Based on ADX Variable Moving Average. It Helps Traders to detect trend reversals and retracements much quicker and more reliable than Tradition Moving Average. 

🧩👉🏽 Market Sentiment Zone Oscillator:- The Indicator Measures and Highlights the Strength of the Market Participants. (Bulls & Bears)  

🧩👉🏽 Price Range Filter_MA:- Used to Filter Out Minor Price Action for a Clearer View of the Trend. You Can Use it For Money Management. (Close Trades When the Candles Start Changing the Color, to the Opposite Direction) 

📊👉🏽 Strategy Works on All Major Currency Markets:

⏳👉🏽 1 Hour Time Frame

🌐👉🏽 Works on Any Verified Broker With MT5 Platform: 

🌐👉🏽 Editors Choice :- Deriv Broker Signup

The MACD Trading indicator

The MACD Trading indicator

Ravi Ranjan    October 07, 2022   

 

hey guys so if you're a beginner trader I'm sure you've read at least one trading guru that tells you about how great the mac indicator is all these guru does is tell you all about the strategies that you can implement in the macd indicator but have you ever watched a full 30-minute training video and walk out still not knowing crap but because you just watched along video your brain kind of tricks you into thinking that you actually learned something and you thought you did something productive with those 30 minutes but in reality, you had no idea what the guy just said yeah that's called some cost fallacy and it's bad but don't worry we've all been there so instead of bull crapping about how great the macd indicator is I'm just going to reveal to you the approximate win rate of the indicator so you don't have to waste your precious time and money testing it yourself

let me do all that for you so first there are two methods that I'm gonna be testing with the macd indicator so the first method is I'm gonna call it the normal method which is just your normal way of using the macd the second is I'm gonna call it the new method this method still uses the macd indicator but in a very different way some say that this second method actually gives a higher win rate let's see so let me give a quick explanation just in case some of you don't know how the macd works there are four components in the macd this blue line is called the macd line this line moves faster and is more sensitive to price action which will be the main focus of the macd indicator this orange line is called the signal line this line reacts slower to price changes and is used to show the direction of a trendless sensitive it is mainly used to filter out market noises next

we have the macd histogram it simply represents the difference between the signal line and the macd line you can see that if the two lines are further apart the histogram gets longer and if the two lines are closer the histogram gets shorter next we have the baseline which just shows the middle area of the mat the indicator when the two lines are above the baseline it indicates a bullish sentiment meaning that the market is uptrending and when it is below the baseline it indicates a bearish momentum or a downtrend so now that you know the parts of the macd I'm gonna explain to you how you use the macd like I said in the start of the video there are two methods that I'm gonna backtest so the first method is called

the normal method is simply how most people use the macd indicator so quick summary there are two lines it can be either above or below the baseline, if the two lines are below the baseline and the macd line crosses above the signal line you go long and if the two lines are above the baseline and it crosses below the signal line you go short pretty simple now for the new method, this is a different way of utilizing the macd the lines can be either above or below the baseline if the lines are below the baseline you wait for it to cross downwards again then you take a short position so after the lines crosses upwards wait for it to cross downwards again while still being below the baseline that's when you take your short position it's the same example with the long position when the lines are above the baseline and it crosses upwards again while still being above the baseline you take along position for the normal method it focuses on spotting reversals as the lines are below the baseline when you go long

however, the new method focuses on trend continuations as you enter a long position when the lines are already above the baseline for my exit strategy since we are solely testing the macd indicator that means I will also use the macd indicator as my exit strategy my exit strategy would be the same for those two methods every time the macd line and the signal line crosses over I exit my trade it doesn't matter if it's above or below the baseline if it crosses over at any point I close the trade there are a couple of rules that i use when backtesting an indicator the first rule is measuring at a candle's close

what do I mean by this well indicators collects data from the candle itself so if the candle is still moving the indicator would also be moving that is why it is important to start measuring from a candle's close  For example here we have a chart let's say I'm testing the normal method so I'll start measuring here because it's a green candle so the close is in the top part of the body so I'll start here and let's say just an example that our exit signal is here and it happens to be a red candle a red candle closes at the bottom of the candle's body so the measurement would be from this point to this point the next rule is that if my entry signal appears immediately after my exit signal I'm going to enter at the next candle so what do I mean by this because our exit strategy is waiting for the macd to cross over there are often times where the macd displays an entry signal right after it displays an exit signal as shown here so if this

happens I'll start measuring at the next candle's close I'm gonna be using the euro USD 15 minute chart for this backtest so here's an excel sheet that I created to record this backtest here I can insert how much wins and loss I already got and it would automatically calculate the win rate so I'll consider it a win if I make a profit it does not matter how much pips i got if I got a profit I'll consider it a win however if I get a loss or a break even I'm counting it as a loss this backtest i'm going to start with a capital of ten thousand dollars and every trade, i'm using 150 times leverage but I'm only trading with one percent of my capital per trade so that I would not blow up my account, this means that I would only risk one percent of my capital per trade this excel sheet also automatically counts your new capital after you trade so for example

let's say I got three pips from trade so I'll enter it here and it'll automatically calculate how much profit you got what's your new capital and what is your new trading budget because like I said i'll only risk one percent of my capital per trade so this automatically calculates one percent from my new capital bear in mind that these results are just an approximate win rate because you can't determine the exact win rate of the strategy by only testing it 100 times so after backtesting these two types of macd indicators 100 times here are the results so for the normal method we have a 42 win rate with 42 wins and 58 losses but even though the win rate is less than 50 we still managed to come out profitable we made a total of ten dollars and thirteen cents or nine pips from our ten thousand dollars investment now remember that we didn't manage our losses and had a proper exit strategy so if we had used proper risk management and a good exit strategy

 I'm pretty sure we would come out more profitable we actually made 343 dollars at some point our biggest single trade win was 115 dollars and 42 cents which were about 57 pips however, our biggest one trade loss was 156 or 77 pips like I said had I used the correct exit plan and proper risk management I could have avoided that huge loss and exited that trade earlier for the new macd method the second macd strategy had a whopping 23 win rate which is very far compared to the normal method with 42 we lost a total of 75 cents which is about 46 pips using this indicator at some point we reached a profit of 138 and 33 cents our biggest one trade profit was 59 and our biggest one trade loss was only 42 dollars unlike the normal method where most losses comes from huge one trade losses this indicator's losses mostly comes from small yet continuous losses so i think even though if we use the tight stop loss and

the correct money management the results wouldn't be any better either because the odds are simply against us the concept of the new method kinda makes sense as it tries to capture continuation trends instead of reversals yet the normal method does a much better job of detecting continuation trends while giving a good entry because in my opinion, the new method tries so hard to capture continuation trends meaning that the trend had already happened it also displays a late signal and it's not even a good entry overall I think the macd does a really good job of spotting early trends of course trends on the market does not always happen sometimes the market is stagnant but the macd rarely gives false signals for entry especially when you combine it with a good exit indicator if you want me to backtest multiple indicators comment which indicators you want me to backtest below and remember the most important factor to determine your success is always money management because trading is just a probability game and finding which indicators have the highest probability would give you an edge and if you pair that up with good money management you will succeed at trading.

William's Alligator trading Strategy

William's Alligator trading Strategy

Ravi Ranjan    October 07, 2022   

 

the best way to use the alligator indicator and I can guarantee you've never heard of the strategy before first of all we all know that the trends on the market don't always happen sometimes the market is stagnant and flat in fact research shows that the financial markets and individual securities trend just 15 to 30 percent of the time and going sideways ranges at 70 to 85 percent of the time ranges and sideways movements are very bad in trading in fact most trading losses comes from when the market is on the range and not have a clear trend so what if there's an indicator that can not only good at detecting trends but also detects when the market is on a range because as traders we profit from trends that is why it is very important to be able to identify those points when the market is trending that is what the

Williams alligator is for the alligator is easy to use and can't find trait setups based on how close together or how far apart the lines are resembling an alligator opening and closing his mouth this indicator can be used in combination with other analysis techniques the alligator uses three smooth moving averages consists of three lines that are all named from parts of an alligator's mouth first, we have the green line the lips which are a five period simple moving average smoothed by three bars on a subsequent value then we have the red line called the teeth which is an eighth-period moving average smoothed by five bars on a subsequent value and a blue line called the jaw which is a 13-period simple moving average smoothed by three bars on a the subsequent value so the main focus of the Williams alligator is the lips or

the green line which is the faster moving average out of the other two moving averages the movement of the lips determines whether or not we take a long position or a short position so the way we use the indicator is actually very simple so when the lips crosses downwards through the other lines it indicates that there may be a chance that the market is on a downtrend and if the green line crosses upwards through the other line it indicates that there may be a chance that the market will be uptrending but don't take positions yet there are other important factors that we need to discuss before confirming that it's a trend so remember I said that the Williams alligator can also, identify ranges in the market so the way we identify the ranges is when the lines are closer together and often cross multiple times in

the middle section without a clear direction you can make an analogy of this as the alligator is still sleeping because there is no trend you can see in this chart the lips did cross downwards but that doesn't necessarily mean that it's on a downtrend yet because you can see after that the lines are still intertwined with each other and constantly crosses without a clear direction we can also identify if a strong trend momentum is happening in the market is by looking if the lips crosses over through the other lines plus the slower lines following in that direction so example in this chart the lips crosses over upwards while creating a gap between the lines these gaps are very important because it shows how strong a trend is the wider the gap the stronger the trend will be usually the direction of the lines also determine how strong the trend is if the lines are spread apart and is heading significantly upwards

it means the price is on a strong uptrend and when the lines are facing in a significant downwards direction it means it's on a strong downtrend the alligator can also indicate if a trend is weakening as a trend comes to an end the lines will come closer together indicating that you should be prepared to close your position so the classic way of using the indicator is to wait for the green line to cross over the other lines when the green line crosses below you take a short position and when the green line crosses above you take a long position well that's actually the worst way you can think of using the alligator strategy because the alligator is inherently a lagging indicator so if you waited for the lines to cross over you would have entered in a trade very late you will miss huge trends like this so after

i tested different indicators over the years i also found the best way that you can utilize the alligator strategy so here's how the strategy goes so first what you need to look at is the lips so the lips can be either above below or inside the other two lines so if the lips are above the lines you wait for a candle to close below the middle line the teeth so if the green line is above the other two lines and a candle closes below the teeth you take a short position it's the same with the long position if the green line is below the other two lines and a candle closes above the teeth you take a long position so if

we used this method instead of the traditional method we actually caught the trend early if we used the traditional way of waiting for the green line to cross over the other lines you would have missed the trend here because it's a very late indicator so that was for my entry signal and our exit signal is actually very simple as well so you close your trade when a candle hits the green line the lips so let me give you an example here so here as you can see in this chart the green line is above the other two lines and the candle closes below the purple middle line which means is a short signal so you need to take a short position but unfortunately, the price reverses instead of continuing but luckily for us because of our exit

the signal we would have exited the trade here because our stop loss is at the green candle same for our take profit as well in this chart you can see the lips are above the two lines and the price drops to below the teeth so you take a short position here notice that the take profit is so effective because it gives out early signals so we don't lose most of our profits another way you can utilize the Williams alligator is by combining it with another indicator I found it best to work with the 200 ema because it shows the overall trend on the market  so the way you trade this indicator combination is by only taking long positions if the price is above the 200 ema and only taking short positions if the price is below the ema

 so for example you can see here that the price is below the ema line and because it's below it means we're only taking signals that display a short position so signals that display a long position would be ignored because remember the overall trend is bearish so here we see the lips are above the other lines and the price closes below the teeth, so you take a short position here and our exit signal would be when the price hits the green line so you'd close your position here for a good profit so to summarize the article  do not use the alligator for the crossover strategy if you want to make money because it's a very late signal instead use the method that I just showed you so I just gave you a potential winning indicator that you can implement right now.

MACD + Parabolic SAR + 200 EMA Trading Strategy

MACD + Parabolic SAR + 200 EMA Trading Strategy

Ravi Ranjan    October 07, 2022   

today I'm revealing a simple trading strategy that is proven to have a high win rate and for this strategy we're going to use a combination of three different indicators the 200 ema parabolic SAR and the macd indicator so first let's start with the macd because that will give us our main entry signal the macd is one of the most popular trading indicator that does a very good job of detecting momentum for the settings i'm going to leave it as it is and just use the default settings so as you can see the indicator consists of three parts first we have the blue line which is called the macd line this line moves faster and is more sensitive to price changes which will be the main focus of the macd indicator next we have the orange line or also known as the signal line this line reacts slower to price changes and is mainly used to filter out market noises and finally

we have the histogram which simply shows the correlation between the macd line and the signal line for example if the line crosses above the signal line the histogram will turn green and if it crosses below the histogram will turn red the gap between the macd line and the signal line also affects the size of the histogram if the gap is wide the histogram will grow longer and if the gap is tight the histogram will grow shorter now technically you could still utilize the macd without the histogram however i prefer to just keep it because there are times where it's actually quite useful like in this example here we can see that the macd line is clearly crossing over however because the lines are too close to each other we can't really see what's going on so instead of looking at the lines you can just look at the color of the histogram to see which direction did the line crossed over now a common way of trading the macd is by simply taking long positions if the macd line crosses above the signal line and taking short positions if

the macd line crosses below the signal line however for this combination strategy we're going to add an extra layer of confirmation which brings us to the second indicator for the strategy which is the parabolic sar the parabolic sar is one of the most simplest and easy to learn indicator that does a very good job of identifying trends on the market and for the settings i'll also leave it as it is and just use the default settings now right off the bat we can clearly see that the indicator consists of multiple dots and the way we utilize them is very simple if the dots are below the candle it indicates that the market is on an uptrend and if the dots are above it indicates that the market is on a downtrend now a common way of trading the parabolics are is by simply taking long positions when the dots are below the candle and taking short positions when the dots are above the candle however using the strategy this way actually results in a very low win rate because remember markets aren't always trending it can also move within

a range like this and notice the parabolic sar isn't really performing well on a sideways market it gave many false signals all the traits that i'm currently showing you in the screen ends up being a loss and that is why for this strategy we're not taking long or short positions based on the dots alone instead we're using them to give extra confirmation and making sure that we're trading within the same direction of the trend now moving on to the third indicator which is the 200 period exponential moving average or the 200 ema for short so for this strategy we're going to use it to identify the long-term trend direction if the price is above the 200 ema it indicates that the market is on an uptrend so we only take long positions and if the price is below the 200 ema it indicates that the market is on a downtrend so we only take short positions and so we have discovered all the three indicators that we're going to be using

so now this is how you trade the full strategy so let's start with long positions the first step is you need to make sure that the price is above the 200 ema the next thing you need to see is the macd line crossing above the signal line while the parabolic sar is positioned below the candle like this and so this will be your long entry next for your exit strategy you want to place your stop loss at the parabolic sar and set your profit target at one to one risk ratio and as you can see our profit target ended up hitting this candle right over here now the next possible entry signal comes up shortly after that we have a crossover upwards on the macd while the price is above the 200 ema however as you can see here

when the crossover happened the parabolic star is still above the candle which is not what we want we want this to be below the candle and so for situations like this what we do is we wait for the dot to go below the candle which is here while making sure that the macd is still crossing upwards and so this will be our long entry signal and again for your stop loss place it at the parabolic sar and set your profit target at one to one risk ratio and as you can see this one is another profitable trade next we spotted another long entry right here we have a cross up on the macd while the parabolic sar is below the candle so again place your stop loss at the parabolic sar and profit target at one to one risk ratio and so

this one ends up hitting this candle right here now let's get into some short examples alright so as you can see this candle closed below the 200 ema meaning we're preparing to take short entries next we saw a cross down on the macd while the parabolic are is above the candle and so we can place a short position right here then place your stop loss at the parabolic sar and set your profit target at one to one risk ratio and so this one is another profitable trade and right over here we spotted another cross down on the macd then you look at the position of the dot which in this case it's above the candle which means this will be another valid short entry next place your stop loss and profit target and as you can see this one ends up hitting this candle right over here so that's enough examples

let's get straight into the 100 test for this back test i'm going to trade the euro usd 30 minute time frame with a starting capital of one thousand dollars and for our money management we are risking two percent over total capital per trade and for each trade we're using 200 times leverage so without further ado let's start back testing and finally after back testing the strategy 100 times the results are in it took us 106 days to reach 100 trades and out of that 100 trades we received a very good win rate of 69 our most wins in a row was 7 and our most losses in row was only three and in total

we made a profit of five hundred and ten dollars and twenty seven cents which equates to around fifty one percent overall gain of our one thousand dollar capital and remember we got this result by risking only two percent over total capital per trade if you want to risk more capital portrayed to get larger returns you can change it to three percent four percent or even five percent per trade and also in this back test i only traded it on one currency pair the euro usd that's why it took 106 days to reach 100 trades if you want more entry signals in a shorter period of time you can just trade it on multiple pairs now while back testing i discovered a couple of tips that you can implement to further increase the win rate for the strategy and one of them is limiting your stop loss

let me explain so normally if you took a position you're setting your stop loss at the dot of the parabolic sar however in this particular trade you can see that the position of the dot is too far from the price therefore if you decided to place your stop loss here your risk will be too large and if the trade ended up hitting the stop loss it will give you a massive loss and that is why i recommend limiting your stop loss to only 0.7 so no matter how far the parabolic sar is your stop-loss will never exceed 0.7 however by doing this you will also limit your upside potential so it's really up to you depending on your risk tolerance and remember i only tested this strategy using one settings if you want to optimize this strategy further you can backtest it yourself using different settings to see which one works best for you so i just revealed to you a simple high win rate strategy that you can immediately use right now.

3 Reversal Strategies for Crypto trading

3 Reversal Strategies for Crypto trading

Ravi Ranjan    October 07, 2022   

first, let me ask you a quick question when you're trading have you ever encountered a situation where you took a buy position when the price was on an uptrend only for that trend to reverse downwards which leaves you holding at the top if so I know it's frustrating because I've been there before and so after countless hours of research and backtesting I actually found a strategy that you can use to predict these reversals before they even happen so strap in because we're going to go very in-depth in this article so first, let's start with the basics of what is a reversal so a reversal simply means a change of trend direction

In this example we have an uptrend that switches to a downtrend then you got yourself a reversal simple now a common mistake that traders make are they think that because the price has gone too high then it's automatically going to reverse this is actually the wrong mindset to have because think about if prices are going higher and higher it means that the upwards momentum is strong so if you tried shorting this market just because you thought it was too high then you're actually trading against a trend which is not a good idea remember prices can always continue higher so with that being said here is a couple of strategies that you can use to predict reversals before they happen the first one is called brick of structure and this is how it works so first in order to spot a reversal the first step is you want to find an existing trend and in this chart, we actually spotted a clear uptrend here notice

how the price is structured it formed higher highs while respecting this bottom level meaning we can also draw an upward trend line below it now here's what you need to remember as long as the price remains above the trend line, it means that the uptrend is still valid so in order for us to find a reversal the price has to break the trend line first and so we want to wait until the price breaks the trend line as you can see here but be cautious just because the price broke out of the trend line doesn't mean that a reversal will happen because even though the short-term trend is down the long-term trend is still up meaning that the price still has a chance to go back upwards so to confirm that the price will not go back upwards we need to wait for signs of momentum loss so

let's let the price run until we find a confirmation now notice the price tried pushing back up and failed then it tried again and failed the second time which created a double top pattern here indicating that buyers aren't strong enough to push the price back up so now we already have multiple reversal signals first we saw a brick of a trendline which means the price broke the uptrend structure and a double top pattern indicating a loss of upwards momentum because buyers fail to push the price back up so all these factors combined have led us to believe that the trend is going to reverse and so this is a good opportunity to take a short position and of course no strategy is 100 accurate so we need to make sure that our exit strategy is in a place so for our stop loss we can place it near a key level which is slightly above the double top pattern and set your profit target at 2 1 risk ratio and as you can see this trade ended up being profitable now

let's look at other variations of this technique so in this chart we spotted a clear uptrend as price is forming higher highs and below it we have multiple rejections meaning we can place an upwards trend line next we can see the price failed to make higher highs and formed a lower highs instead while also breaking the upwards trend line so this indicates that the upwards buying pressure is weakening and that sellers are starting to push back but again don't take any positions yet because remember the overall trend is still an uptrend so we still need further confirmation next we can see that the price tried pushing back up and failed now notice what the price is currently forming it formed lower highs and lower lows which means we now have a current downtrend so

let's recap what we have currently first we have momentum loss indicated by the price failing to form higher highs then we have a trendline breakout indicating that the uptrend structure was broken and finally we have a current downtrend because prices forming lower highs and lower lows so all these factors combined has confirmed that the trend has shifted to the downside and so this is a good opportunity to enter a short position and for your exit strategy, you can place your stop loss at the nearest key level and set your profit target at 2 1 risk ratio and as you can see this ends up being another profitable trade now what I just showed you is how we spot reversals if the price were to break out of a key level but remember prices don't move like this every time there are also scenarios where the price bounces off the key level instead which brings us to the second technique to spot reversals

which is using key levels and this is how it works the first step is we want to find a key level for the price to bounce off and in this case we actually spotted a resistance level up here because the price went up hit and reversed from it now the next step is we want to wait for the price to approach that key level once again and as you can see we saw an uptrend approaching the resistance level but remember you cannot just assume that a reversal will happen just because the price hits a key level because price can always break right through so we need to have extra confirmation to make sure that the price will actually reject this key level and we can do that by looking for overbought and oversold levels with the help of the stochastic indicator so first go to the indicator section type in stochastics and apply it onto your chart for the settings i like to leave it as it is and just use the default settings

so for this setup what we want to look for is price touching the key level while the stochastic is displaying overbought or oversold like in this example right here but again prices can still break right through even though the stochastic is that overbought so to confirm that there's actual downwards momentum at this area you want to wait for the sarcastic to cross below the overbought lines again and once this happens you can take a short position and just in case the trade fails we need to have our exit strategy ready so for our stop loss we can place it slightly above the key level and set your profit target at 2 times the risk and as you can see this trade ended up being profitable now moving on to the third strategy for spotting reversals which is by using trend indicators like the exponential moving average and this is how it works so first go to the indicator section type in exponential moving average and apply two of it onto your charts and for the settings set the first one by 10 and the second one by 20.

so now you have two ema applied and the way we read this indicator is very simple if the line crosses above it indicate that the market is uptrending and if the line crosses below it indicates that the market is downtrend however for this version of the strategy we don't immediately take positions just because the ema crosses over because if the market is unarranged like this, it will actually give you many false signals so instead you want to use this indicator as a secondary tool to confirm a reversal and this is how you do it so again the first step is you want to find a key level for the price to bounce off and we actually spotted a resistance level up here as price goes up hit and reverse downwards next you want to wait for the price to approach the same key levels again and once the price approached it you use the ema to confirm the trend change in this area by waiting for the lines to cross over downwards and once this happens you can take a short position now for your exit strategy you can place your stop loss right where the ema crosses over and set your profit target at 2 1 risk ratio and as you can see this ends up being another profitable trade so those are all the different strategies that you can use to spot reversals using this technique.

Supertrend Trading Strategy

Supertrend Trading Strategy

Ravi Ranjan    October 07, 2022   

 

the best strategies that you can use with the super trend indicator if you're still a new trader and you want to find a very simple indicator that not only tells you the direction of a trend but also gives specific buy or sell signals that you can just follow immediately then the super trend is the perfect indicator for you so a good thing about this indicator is that not only it's very simple to use but it's also a very good indicator because the super trend is based on the atr so that means the indicator generates signals not only based on the momentum but also the current volatility of the market  so if you open the super trend indicator this is what it looks like a single line that switches from green to red and vice versa and

how you use it is pretty self-explanatory if the line turns green meaning you take a buy position and if the line turns red meaning you close your previous buy position and open a new cell position but there's actually one big problem if you use the strategy this way because the super trend indicator is constantly giving out signals non-stop so when you're using this indicator there are no times where you don't take any positions it's either you are forced to take a buy or sell position there are no stops so this can be a huge problem because if you're a trader you need to know that the market isn't always trending the market can also go in a range so because the super trend is constantly showing signals non-stop meaning it will also show signals

when the market is on a range like in this example you can see that the market was on an uptrend and the super trend displayed a buy signal and now you see that the trend had already ended and the market went flat but the problem is because the super trend is always giving signals it displayed a sell signal even though there wasn't any trend so what we need to do is filter out these range markets so that we only take signals from the super trend if the market is actually trending this is how you do it first you need to put three super trend indicators the first indicator value you need to set it by 3 and 12. the next one you set it as 1 and 10 and the third one you set it as 2 and 11. so the way we use the supertrend strategy is by only taking positions if all the lines are in the same color for example in this chart we can see that the bottom line turned green but the other two lines are still red so you don't want to take positions yet next you can see at this point all the lines turned green and this is where you want to take a buy position

let's look at another example in this chart we can see that the top line turned red but the other two lines are still green so you don't want to take any positions yet next you can see all the lines are now colored red so this is where you want to take a cell position and for our exit signal there's actually a lot of ways you can do this the first one is set a take profit or stop loss so you close your position if your trade reaches a certain amount of profit or losses another way is if the color of the lines no longer matches like in this example we can see that the color of the lines are all green so you take a by position next you can see that one of the lines switches to a red color and now that the lines no longer matches

this is where you want to close your buy position the next strategy that i personally use when trading the super trend indicator is by combining it with another indicator such as the 200 ema  so because the super trend can be used to detect short to medium term trends and the 200 ema line can be used to detect longer term trend that is why these two can be the perfect combination for this strategy i'm using the default settings of the super trend indicator this is how you trade the strategy so you only take buy signals from the super trend when the price is above the 200 ema line and you only take sell signals from the indicator if the price is below the 200 ema line let me give you an example in this chart we can see that the super trend gave a buy signal but the price is still below the 200 ema line so we don't want to take positions yet once the price crosses above the 200 ema line

while the super trend is still colored green that is the time where you want to take a buy position and you close your trade here when the super trend turns red let's move on to another chart you can see that the super trend indicates a sell signal but the price is still above the 200 ema so we don't want to take positions yet now once the price is below the 200 ema line while the super trend is colored red that is where you want to take a cell position next you can see that the super trend turns green so this is where you want to close your position another strategy that you can combine with the super trend is with the kumo cloud so the kumo cloud is basically just an ichimoku cloud indicator that you disabled all the parts except the two lead lines and i'm also going to change the color so that it's easier to look at so

now we have the komo cloud the rules of the kumo cloud is very simple if the price is above the kumo cloud you only take buy signals and if the price is below the kumo cloud you only take cell signals but if the price is inside the clouds you don't take any positions let me give you an example in this chart we can see that the indicator gave a buy signal but the price is still below the clouds so you don't want to take positions yet next you can see that the price is inside the clouds so you also don't take any positions here next you can see that the price is above the clouds while the super trend is colored green so this is where you want to take your buy position and it's exactly the same for our sell signal as well we only take cell positions if the price is below the clouds and the super trend is colored red and for our exit strategy there are actually a couple of ways you can do this the first one is you can set a take profit or a stop loss so you close your trade if it reaches a certain amount of profit or loss you can also close your trade if the price crosses over the clouds like in this example you can see that the candle closed inside the clouds so you can close your position here.

Pullback Trading Strategy

Pullback Trading Strategy

Ravi Ranjan    October 07, 2022   

 

a simple pullback strategy that will change the way you trade so let's start with the basics what is a pullback exactly a pullback is simply a correction that happens in an existing trend and so why is it so important to understand let me give you a scenario let's say that the current market is on an uptrend and you're looking to enter a buy position now if you're an experienced trader you would know that it's quite rare for a trend to move in a continuous upward direction most trends will actually look like this where the price is making a series of higher highs and pullbacks and so if you took a position when the price is making higher highs there's a chance that a pullback or even a trend reversal might happen so instead of taking that risk it's safer to wait for the trend to make a pullback before entering a position this way you are essentially buying the trend at a lower risk

now I know what you're thinking but how would I know that the pullback will end here and not just continue downwards well based on my research I actually discovered three common levels where pullback usually ends and the first level is support and resistance let me show you an example over to the left, we saw the price rejected this level multiple times which makes this an area of resistance next the price broke out of the resistance and made a pullback notice where the pullback ended the previous resistance now turned support and then we saw the price went up even more and made a pullback once again and where did the pullback ended the previous resistance

now turn support the same concept also applies for downtrends as well moving on the next level where the market tends to pull back into is the trend line so in this chart, we spotted a downtrend and so we can place a trend line above here because price rejected it multiple times now notice that the price made a pullback towards the trend line and went down pulled back towards the trend line and went down so that was an example of the price pulling back towards a trend line another level where the market can possibly pull back into is the moving average here we spotted an uptrend and so we can apply the 50 period moving average as our key level now remember for

this specific example we are using the 50 period because that's what the market is reacting to in the past markets can also react to other periods like the 20 100 and 200 period so you need to adjust depending on what the market is reacting to and as you can see the price made a pullback towards the moving average and traded higher pull back towards the moving average and traded higher and that was an example of the price pulling back towards the moving average now there are also situations where you can find multiple levels in one chart like in this example we have the 50 period moving average applied and the price pulls back but notice that there's actually a level of support intersecting here this is called an area of high confluence and usually when price approaches an area of confluence there's a higher chance that a reversal will form but keep in mind you cannot blindly enter a position just because the price made a pullback towards the level prices can still break through it and continue downwards and that is why you need to use other confirmation techniques before entering a position and one of the confirmation techniques

that we can use are candlestick patterns let me show you an example so here's a current downtrend as prices made lower highs and lower lows next we have the 50 period moving average applied as our key level and a resistance line intersecting it which makes this an area of high confluence now as price made a pullback towards the confluence you're looking to see if the price would show some type of rejection and what we got was a candlestick pattern in the form of a bearish engulfing pattern which is when the second candle's body completely engulfs the previous candle so what this shows us is that at first buyers pushed the price all the way up creating a medium-sized green candle but then sellers stepped in and started pushing the price back down even as far as surpassing the previous candles opening price which indicates that there's a strong selling pressure at this area and

if you want a stronger confirmation you can wait for the next candle to form which happens to be another big red candle so this is a good opportunity to take a short position so let's show this again on another chart over to the left we spotted an area of resistance as prices rejected this level multiple times then we saw the price broke out of the resistance and made a pullback now to confirm that the price will actually reject this level and continue upwards you're looking to see if there's some type of rejection at this area and what we got was another ejection candle in the form of a hammer which is when the bottom wick is sticking out so what this tells us is that at one point sellers tried pushing the price all the way down breaking the support level before buyer starts coming in and pushes the price back up indicating that there's a strong buying pressure at this key area now to further confirm that the price will continue upwards the next candle after that was a big green candle and so this is a good opportunity to take a long entry so to

summarize the key here is simply finding candlestick patterns that signals rejection moving on the next confirmation technique that you can use is called break of a trendline and this is how it works in this chart we have a downtrend and a trendline drawn as our key level now as price has made a pullback towards the trend line we want to confirm that the price will actually reject this level and continue downwards we can do that by drawing another smaller trend line right at the pullback once the price broke out of the smaller trend line that's where you want to enter your cell position so let's show this again in another chart here's an uptrend and we have our trend line placed below it we also spotted a resistance line here which makes this an area of high confluence now as price made a pullback towards

 the confluence you draw a smaller trend line above it and to confirm our signal you need to wait for the price to break out of the smaller trend line once this happens you take a buy position now keep in mind if you found a setup where it's not suitable to use the trendline breakout technique don't force it instead you want to use other confirmation techniques in this case we saw a bullish engulfing pattern which means we're using candlestick patterns to confirm this setup that is why it's important to master multiple confirmation techniques so that you don't just rely on one strategy so if you found a market that doesn't support a particular strategy you can always use the others to avoid missing trade opportunities now moving on another confirmation technique that you can use is with the rsi indicator but first you want to edit the rsi by going to settings and change both of these values to 50

which creates a single line in the middle like this and this is how the strategy works here's the usd cad with the rsi indicator applied and as we look to the right we saw the price rejected this level multiple times which makes this an area of resistance next the price broke out of the resistance and made a pullback now you're looking to see whether the price will actually reject this level and continue upwards the way you do that is by waiting for the rsi to cross above the middle line so this will be a good long entry let's show this again in another chart here we have a downtrend and the rsi indicator applied then we saw price rejected this upper area multiple times meaning we can place a trend line above it next we also have your clear level of support which makes this an area of confluence now as price came back up to this level we want to confirm that the price will actually reject this level and continue downwards we do that by waiting for the rsi to cross below the middle line so this is a good opportunity to enter a short position.