QQE Synergy Trend Forex Trading Strategy

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QQE Synergy Trend Forex Trading Strategy

Many people think that trading is the same as gambling and that it is no difference that gambling in the casino. Some even say that trading is just a glorified form of gambling, allowing people to gamble without guilt.

Well, trading is not gambling. If it were so then no one should be able to make it a profession and stay in the game long-term. Truth is there are many traders who are consistently profitable and have made it their living.

Although trading is not gambling, it does share some similarities. In fact, many professional traders could say that trading is gambling only that they have made themselves the casino. Although gambling is a game of chance, casinos use probabilities in order to ensure that they are profitable. They would make sure that they would have a statistical edge that when played out hundreds or thousands of time, would allow them to come out on top. Traders also think the same way. Traders look for edges that would allow them to be profitable over the long-term based on statistics. All they have to do is to let the law of large numbers do its work.

One way to increase your statistical edge is by looking for confluences. Confluences are points in a price chart where technical traders could identify that price is moving a certain direction based on two or more indications.

QQE Synergy Trend Forex Trading Strategy is a strategy that trades on confluences coming from two high probability technical indicators. When these two technical indicators agree on a trade direction at almost the same time, there is a high chance that price would move in the direction indicated.

Qualitative Quantitative Estimation

Qualitative Quantitative Estimation (QQE) belongs to a rare class of technical indicators, which consistently works on most market conditions for decades. It is a trend following indicator that indicates trend direction and trend reversals quite effectively.

QQE is largely based on the Relative Strength Index (RSI), which is also a very effective oscillating technical indicator. The difference between QQE and RSI is that QQE applies a smoothing effect which allows traders to identify trend direction and trend reversals more clearly.

QQE is plotted as an oscillating line that could range from 0 to 100 with a midline at 50. It plots two lines. The main line which is the solid blue line and the signal line which is the dotted yellow line.

Positive lines generally indicate a bullish trend bias, while negative lines generally indicate a bearish trend bias. However, if the lines are overextended away from the midline, there is also a high chance that price might reverse to its mathematical mean.

Trend could also be identified based on the positioning of the two lines. If the blue solid line is above the dotted yellow line, the market is said to be in a bullish trend. If the blue solid line is below the dotted yellow line, then the market is said to be in a bearish trend. Crossovers between the two lines could be considered as a trend reversal signal.

Indicator Arrows

Indicator Arrows is a custom technical indicator, which is also a trend following indicator. It produces trend reversal signals based on the confluence of a modified Moving Average Convergence and Divergence (MACD) and an Exponential Moving Average (EMA).

This indicator provides entry signals whenever it detects a trend reversal coming from its underlying MACD and EMA parameters. It plots an arrow pointing up whenever it detects a bullish trend reversal. It also plots an arrow pointing down whenever detects a bearish trend reversal.

Because this indicator is also based on confluence, it also produces trend reversal signals that are highly reliable and have a high probability of resulting in an actual trend.

Trading Strategy

This simple trading strategy trades on trend reversals based on the confluence of the QQE indicator and the Indicator Arrows signal.

Trade signals typically start with the Indicator Arrows producing a trend reversal signal that goes against the current trend direction. These signals are simply based on the Indicator Arrows plotting an arrow pointing the direction of the assumed trend.

Then, if the trend reversal pressure persists the QQE indicator would then follow. This is indicated by the crossing over of the solid blue line and the dotted yellow line.

Both signals should point the same direction at almost the same time.

Indicators:

  • Indicatorarrows
  • QQE

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

Currency Pairs: FX majors, minors and crosses

Trading Sessions: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • The Indicator Arrows should plot an arrow pointing up.
  • The solid blue line of the QQE indicator should cross above its dotted yellow line.
  • These bullish trend reversal signals should be closely aligned.
  • Enter a buy order on the confluence of the conditions above.

Stop Loss

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

Exit

  • Close the trade as soon as the Indicator Arrows plots an arrow pointing down.
  • Close the trade as soon as the solid blue line of the QQE indicator crosses below its dotted yellow line.

QQE Synergy Trend Forex Trading Strategy

QQE Synergy Trend Forex Trading Strategy 2

Sell Trade Setup

Entry

  • The Indicator Arrows should plot an arrow pointing down.
  • The solid blue line of the QQE indicator should cross below its dotted yellow line.
  • These bearish trend reversal signals should be closely aligned.
  • Enter a sell order on the confluence of the conditions above.

Stop Loss

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

Exit

  • Close the trade as soon as the Indicator Arrows plots an arrow pointing up.
  • Close the trade as soon as the solid blue line of the QQE indicator crosses above its dotted yellow line.

QQE Synergy Trend Forex Trading Strategy 3

QQE Synergy Trend Forex Trading Strategy 4

Conclusion

This trading strategy is an excellent trade entry strategy. It produces entry signals that have a very high probability of resulting in a trend. Successful trade entries could potentially produce high reward-risk ratios as price can run with the trend.

This strategy is best used as an entry setup. It is still best to use this strategy in a zone on the chart where you could expect a probable trend reversal.

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