5 Minute Trend Following Trading System:
This strategy uses a 5 minute chart with recommended pairs such as UJ, UCHF, GU, EU, UC, AU, EJ and gold. The session recommended in this system is EU open until US close.
Forex Indicators:
- Signal Arrows
- MACD
- Volatility Channel
- Laguerre
- Slope Direction line
- Pivot Points
- Guppy Multiple Moving Averages (GMMA)
The Rules
All the criteria must be met before entering a trade. Follow the rules so that you can avoid flase signals. Only take trades where at the signal bar or one after all these rules apply! We enter the next bar after the signal.
For Long entry:
- Wait for a long signal alert
- GUPPY MMA: The green lines must be above the red lines! Green, Red and Yellow lines must agree and head north. All the lines must be going in the same direction!
- LAGUERRE: Laguerre line must cross the 0.15 from below and head up
- MACD must be above 0
Set stop loss to 5 pips plus spread below recent low.
ALTERNATE STOP LOSS: 20 points on default pairs and 25 point on more volatile pairs such as the GBP pairs and crosses. Choose whatever SL method fits you best
To exit position, close half of the position on the first pivot point and let the other half run till the slope direction line goes red
You can choose your own method and close positions at pivot points or when slope direction line goes red after a move, or when price (a new candle) opens on the other side of the volatility channel
For short entry:
- Wait for a short signal alert
- GUPPY MMA: The green lines must be below the red lines! Green, Red and Yellow lines must agree and head south. All the lines must be going in the same direction!
- LAGUERRE: Laguerre line must cross the 0.75 from above and head down
- MACD must be below 0
- Set stop loss to 5 points plus spread above recent high.
ALTERNATE STOP LOSS: 20 points on default pairs and 25 point on more volatile pairs such as the GBP pairs and crosses. Choose whatever SL method fits you best
To exit position, you can then choose to close half of the position on the first pivot point and let the other half run till the slope direction line goes blue.
You can also choose your own method and close positions at pivot points or when slope direction line goes red after a move, or when price opens on the other side of the volatility channel.
Breakouts
Though we avoid trading breakouts, the guppy MMA shows us exactly when this is happening. Once a breakout has occurred whereby the yellow lines cross the red lines but the green lines are still below the red, we would expect the yellow lines to retrace back. This is the point where we would be waiting to place our new positions in the direction of the new trend.
Do not place trade during breakouts, wait for the price to retrace.
Long Breakout:
The red lines had been above the green lines then the yellow crossed the red lines and soon the price retraced to the other lines. The green are now above the reds and they show a long trend.
Short Breakout:
The indication of a long trend is when the red lines had been below the green lines. The yellow lines crossed the green and red lines. Once the green lines have been below the red lines we can say that we are in a short trend now and we can wait for signals.
If we want to identify a long trend. The red lines must be above the red lines. For short trend, green lines must be below the red lines.
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