Dynamic Channel, Contrarian Forex Trading System
The dynamic channel, contrarian is a forex trading system that is based on the stochastic and price dynamic channel indicators. This method is suitable to all currency pairs and works best in a 15-minute or higher timeframe but it is recommended to be used on a 4-hour timeframe.
MT4 Indicators:
- Stochastic (5,3,3,)
- Price Dynamic Channel indicator
Trading Rules:
- The price tends to stay between these bands.
- If the prices are outside all three bands, there is a strong trend, but it will quickly revert to the bands.
- Look for the prices to stop at the orange band or the red one. If it stops at the upper side of the bands, look for the stochastic to be above 80.
- Wait until it crosses down, and then go short with two trades.
- Put the Stop Loss one pip above the last high, the first Take Profit at the same number of pips as the Stop Loss, and the second Take Profit at twice the Stop Loss.
- When you get to the first target, move the Stop Loss of the second trade to break even.
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