Trend-following strategies are the types of strategies that allow traders to make so much in just one trade. This is because trend following strategies allow traders to capture a trend at the beginning, hold it as it evolves into one of those big trends, and exit the trade as soon as it is about to end. However, the key to these types of strategies is to have a filter that allows traders to avoid low probability trades and only accept trades with a higher trading probability.
The Fib Tunnel Cross Forex Trading Strategy is one of those strategies that enables traders to do this with great accuracy. This way, traders have a better chance of catching trades that could lead to a big trend wave, meaning higher returns.
DEMA stands for Double Exponential Moving Average. DEMA was first presented in February 1994 by Patrick Mulloy in the journal "Technical Analysis of Stocks and Commodities". For many traders, it has been very useful as a modified version of an Exponential Moving Average (EMA) as it further smooths out the moving averages that many traders use to determine trend direction. This smoothing of the moving average then results in a less choppy moving average and fewer false signals.
The Fib Tunnel is a custom indicator with a modified moving average and has several outer bands next to the moving average based on the Fibonacci ratios.
In the lower time frames these bands become more visible, while in the higher time frames the distance between the bands tends to contract. In the lower time periods it could be used as an entry area for retracement strategies. Traders could wait for price to return within the bands to enter a trending market while price is declining. Traders could also use it for medium reversal strategies in narrow-range markets. Once the price is out of the ranges, it could be an indication that the price could reverse, especially in tight market conditions.
However, in the higher periods of time, the ligaments contract and become less visible. The above techniques become irrelevant. However, traders could use the indicator as a crossover strategy by waiting for the price to cross the modified moving average as well as the outer bands around it.
Double CCI Woody
The Double CCI Woody Indicator is a tailor-made commodity channel index indicator. It's an oscillating indicator that prints histogram bars around a center line at zero and allows the figures to fluctuate freely in their own window.
It is very responsive to price movements and allows traders to see its ups and downs. However, with the right parameters, it is pretty good at determining the direction of the trend.
Trading strategy concept
The Fib-Tunnel Cross Forex Trading Strategy is a trend-following strategy that enables traders to enter the market on trend reversals using the DEMA indicator and the Fib-Tunnel indicator. The Fib Tunnel indicator would serve as a long term trend while the DEMA indicator would serve as a short term trend. Trades are then made during the crossover of the two modified moving average indicators.
However, not all trading signals generated by these two indicators should be considered. The crossover of the two indicators should match the Double CCI Woody Indicator. This is because the Double CCI Woody Indicator would only reverse if the reversal in price movements appears to have momentum. It then usually precedes the DEMA and Fib tunnel crossover, which makes it useful as a signal of a likely trend reversal.
- FIB tunnels
- Doublecci Woody
Time window: 4-hour and daily charts
Currency pairs: Major and minor pairs
Trading session: Tokyo, London and New York
Buy (Long) Trade Setup
- The Double CCI Woody indicator should print positive histogram bars that indicate an upward trend
- Enter a buy order while the DEMA indicator is exceeding the Fib Tunnel indicator
- Set the stop loss below the moving averages
- Close the trade as soon as the Double CCI Woody indicator prints a negative histogram bar
Sell (Short) Trade Setup
- The Double CCI Woody indicator should print negative histogram bars that indicate a bearish trend
- Enter a sell order when the DEMA indicator is below the Fib-Tunnel indicator
- Set the stop loss above the moving averages
- Close the trade as soon as the Double CCI Woody indicator prints a positive histogram bar
This simple trend following strategy allows traders to perform crossover setups with higher probability using the modified moving average indicators DEMA and Fib Tunnel. The probability of the generated trades is further improved by filtering out trades with lower probability using the Double CCI Woody indicator. It also enables traders to spot big trends that could last for some time as shown above.
Forex Trading Strategy Installation Instructions
The Fib Tunnel 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 history data and trading signals.
Fib Tunnel Cross' cross forex trading strategy provides the ability to spot various specifics and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can assume further price movements and adjust this strategy accordingly.
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How do I install the Fib Tunnel Cross Forex Trading Strategy?
- Download Fib Tunnel Cross Forex Trading Strategy.zip
- * Copy mq4 and ex4 files to your Metatrader directory / Experts / Indicators /
- Copy the tpl file (template) into your Metatrader directory / templates /
- Start or restart your Metatrader client
- Select the chart and timeframe in which you want to test your forex strategy
- Right click on your trade chart and hover over "Template".
- Move right to select Fib Tunnel Cross Forex Trading Strategy
- You will see that the Fib Tunnel Cross Forex Trading Strategy is available on your chart
* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already built into the MT4 indicators of the MetaTrader platform.
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