Elliott Wave Cross Foreign currency trading technique

Crossover strategies are probably one of the most popular types of trading strategies among newbies. This is probably due to its ease of use. They simply act whenever moving averages overlap. However, many new traders who try crossover strategies first often have unrealistic trading expectations. This is probably due to part of the hype surrounding some crossover strategies. With a particular strategy, you would often hear claims of 90% or 99% win rate. Most of it is not true, especially when applied to crossover strategies. This is because crossover strategies are trend following or reversal strategies. Most trend reversal strategies rely on high reward-risk ratios instead of high profit rates. So, instead of looking for strategies that are 99% of the time right, look for strategies that can help you win more than twice compared to what you risked in the stop loss.

The Elliott Wave Cross Forex trading strategy is one of those trend following or reversal strategies that allows traders to benefit from big moves while achieving a decent win rate.

Alligator display

The alligator indicator is a custom indicator used for crossover strategies. It consists of the three moving averages that the developer calls Jaws, Teeth and Lips. The jaws represent the long-term moving average, the teeth represent the medium-term moving average, and the lips represent the short-term moving average. These moving averages can be set at different times and moved forward or backward. This allows traders to customize their crossover trading strategies depending on what works for them.

EMA 5 10 34 crossover display

The crossover indicator EMA 5 10 34 is another user-defined indicator that was specially developed for crossover strategies. As the name suggests, the default parameters use Exponential Moving Averages (EMA) with a short-term moving average of 5, a medium-term moving average of 10, and a long-term moving average of 34. However, this default setting could be adjusted. The periods of each moving average can be changed, as can the type of moving average used. This indicator then prints arrows that indicate a change in trend direction based on the crossover of the moving averages.

Elliott wave oscillator

The Elliott wave oscillator is a simple oscillating indicator that is also based on crossovers of moving averages. In fact, it is a basic assessment of the difference between moving averages. It is calculated by subtracting the value of the short-term moving average from the long-term moving average. The resulting difference would then be displayed as a histogram bar in a separate window. Then positive histograms are printed when an upward trend is detected and negative histograms when a downward trend is detected.

Trading strategy

The Elliott Wave Cross Forex trading strategy is based on the confluence of the above indicators, which are essentially crossover indicators.

The EMA 5 10 34 indicator and the Elliott wave oscillator would serve as a longer-term trend filter. These indicators would normally change direction almost simultaneously. An arrow indicating a change in direction usually appears whenever the Elliott wave oscillator also crosses its center line.

The alligator display would then show the actual input signal. A trade build-up is always generated when the short-term moving average exceeds the medium-term and long-term moving average. However, these crossovers should match the crossover EMA 5 10 34 and the Elliott wave oscillator.

Indicators::

  • EMA 5 10 34 CrossoverI
  • alligator
    • Jaw time: 28
    • Jaw displacement: 8
    • Tooth period: 12
    • Tooth shift: 5
    • Lip period: 7
    • Lip shift: 3
  • Elliott Wave Oscillator34

Time window: 1-hour, 4-hour and daily charts

Currency pairs: Main and secondary pairs

Trading session: Meetings in Tokyo, London and New York

Buy trade setup

entry

  • A blue upward arrow should be printed on the chart, indicating a bullish trend reversal
  • The Elliott Wave Oscillator should print positive histograms that indicate an upward trend
  • Enter a buy order as soon as the lime line crosses the red and blue lines, which indicates a bullish trend reversal

Stop loss

  • Set the stop loss below the moving averages

output

  • Close the trade as soon as the Elliott Wave Oscillator starts printing negative histograms

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Sell ​​Trade Setup

entry

  • A red down arrow should be printed on the graph to indicate a reversal in trend reversal
  • The Elliott wave oscillator should print negative histograms that indicate a bearish trend
  • Place a sell order as soon as the lime line is below the red and blue lines, indicating a reversal in trend reversal

Stop loss

  • Set the stop loss above the moving averages

output

  • Close the deal as soon as the Elliott Wave Oscillator prints positive histograms

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Conclusion

The Elliott Wave Cross Forex trading strategy is basically a confluence of trading signals based on moving average crossover strategies. This allows traders to filter out trend reversals with a low probability and enables traders to make trades with a high probability that lead to a strong trend.

This trading strategy is based on high-yield trades rather than an extremely high profit rate. It enables traders to catch trades that would result in a reward / risk ratio of 3: 1 to 6: 1, sometimes even higher. However, the win rate is still respectable as traders are made to do business that is only of high quality.


Installation instructions for forex trading strategies

The Elliott Wave Cross Forex trading strategy is a combination of Metatrader 4 (MT4) indicator (s) and template.

The essence of this forex strategy is to transform the accumulated historical data and trading signals.

The Elliott Wave Cross Forex trading strategy offers the opportunity to recognize various peculiarities and patterns in price dynamics that are invisible to the naked eye.

Based on this information, traders can accept further price movements and adjust this strategy accordingly.

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Click here to get the XM Trading Account Opening Guide step by step

How do I install the Elliott Wave Cross Forex trading strategy?

  • Download Elliott Wave Cross Forex Trading Strategy.zip
  • * Copy mq4 and ex4 files into your Metatrader directory / Experts / indicators /
  • Copy the tpl file (template) into your Metatrader directory / templates /
  • Start or restart your Metatrader client
  • Choose the chart and time frame in which you want to test your forex strategy
  • Right-click on your trading chart and move the mouse pointer over "Template".
  • Move right to select the Elliott Wave Cross Forex trading strategy
  • You will see that the Elliott Wave Cross Forex trading strategy is available on your chart

* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already integrated in the MT4 indicators of the MetaTrader platform.

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