FX Forecaster Forex Trading Strategy

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FX Forecaster Forex Trading Strategy

There are many traders who would attempt to predict where price is going. Some of them are quite good at it. They could look at a chart and forecast where price might be moving next. This comes with experience. These traders have paid their dues by spending countless hours observing the market. As a result, they have a good grasp of how the market behaves.

However, this is easier said than done. Truth is, no one really knows for sure where the market would move. It is very unpredictable. Predicting where price would move is like predicting the thoughts of a million different traders.

What traders can do though is make an educated guess. Traders could look at price points where the market reversed and note it as a point of interest. They could look for patterns of how price is moving and predict where it might move next. They could also use indicators to anticipate if price is ready to make the move they are expecting.

For example, price might be creating a staircase pattern with higher high and lows. Traders could also note that price is respecting a moving average line and tends to bounce off it. Now, they could anticipate trade direction, which would be a buy trade setup. The only thing they need to anticipate is when the market would be ready to make the next bullish move. Here, they could use an indicator to time the entry.

FX Forecaster Forex Trading Strategy does this in a systematic manner. It allows traders to anticipate where price is moving, which direction, and when to take the trade.

FX Forecaster

FX Forecaster is unique custom indicator which provides trend direction both on the long-term and the short-term pulses.

It is an oscillating indicator which is plotted as histograms. The difference between this oscillator and other oscillators is that it plots two different histograms that oscillate on one chart. One histogram represents a longer trend, while another histogram represents the shorter-term trend.

The histogram bars oscillate in a free range which could move from positive to negative and vice-versa. Positive bars indicate a bullish trend while negative bars indicate a bearish trend. Traders could use the crossing of the bars over the midline as a trade signal.

Because there are two sets of bars, traders could also use the crossing over of the bars with each other. This would be like taking trades on the crossover of two moving average lines.

Trading Strategy

This trading strategy is a trend following strategy that provides trade signals on short-term trend pulses that are in confluence with the direction of the longer-term trend.

To identify trend direction, we will be using a 50-period Exponential Moving Average (EMA) line. The slope of the 50 EMA line would represent the direction of the trend. It would also serve as a dynamic support or resistance area which price should respect.

The long-term trend histogram bars of the FX Forecaster indicator, represented by aqua bars, should be in confluence with the 50 EMA trend direction. The bars should generally stay positive or negative depending on the direction of the trend.

Finally, the short-term trend histogram bars of the FX Forecaster indicator, represented by violet bars would serve as the entry signal based on the short-term pulse. The violet bars should crossover with the aqua bars in the direction of the trend.

Indicators

  • 50 EMA (Green)
  • FXForecaster (default setting)

Preferred Time Frames: 15-minute, 30-minute, 1-hour and 4-hour charts

Currency Pairs: major and minor pairs

Trading Sessions: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • Price should be above the 50 EMA line.
  • The 50 EMA line should be sloping up.
  • Price should be respecting the area near the 50 EMA line as a dynamic support.
  • The aqua bars of the FX Forecaster indicator should be above zero.
  • Price action should be visually trending up.
  • Enter a buy order as soon as the violet bars of the FX Forecaster indicator crosses above the aqua bars.

Stop Loss

  • Set the stop loss on the fractal below the entry candle.

Exit

  • Close the trade as soon as the violet bars of the FX Forecaster indicator crosses inside the aqua bars.

FX Forecaster Forex Trading Strategy

FX Forecaster Forex Trading Strategy 2

Sell Trade Setup

Entry

  • Price should be below the 50 EMA line.
  • The 50 EMA line should be sloping down.
  • Price should be respecting the area near the 50 EMA line as a dynamic resistance.
  • The aqua bars of the FX Forecaster indicator should be below zero.
  • Price action should be visually trending down.
  • Enter a sell order as soon as the violet bars of the FX Forecaster indicator crosses below the aqua bars.

Stop Loss

  • Set the stop loss on the fractal above the entry candle.

Exit

  • Close the trade as soon as the violet bars of the FX Forecaster indicator crosses inside the aqua bars.

FX Forecaster Forex Trading Strategy 3

FX Forecaster Forex Trading Strategy 4

Conclusion

This strategy is an excellent high probability strategy that could be used effectively in a trending market condition. This could be applied on any market that is forming an ascending or descending staircase pattern.

This strategy has a decent reward-risk ratio and an excellent win rate. If used in the correct market condition, this strategy could do wonders and produce consistent profits.

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