Profitable trading is about timing. It's about knowing when to get in and when to get out of a trade. It's about buying when the price is low and selling when the price is high. Sounds easy right? Or is it?
Many would say it is quite difficult to act and it is true. This is because every candle and price change down to the last pip is a decision making process for traders. This exhausts the traders as the trading session continues. By the end of the trading session, traders are already tired and easy to make wrong decisions.
The key to a profitable trading strategy is that a rules-based trading strategy is not always right. It's not about buying the lowest lows or selling the highest high all day. It's about being right most of the time, more times than you lose, or gaining higher returns than you lose profits. To do this, traders need to take a systematic approach to trading that never tires of making decisions from start to finish.
The Median Price Cross Forex Trading Strategy is a rules-based systematic trading strategy that allows traders to get in and out of the market and make more profits than they lose. This enables them to make money most days and allows traders to steadily grow their accounts.
Donchian Channel Midline
The Donchian Channel is a very useful trading indicator. It is an indicator that uses bands similar to the Bollinger Bands. The Donchian Channel, however, is a much simpler way of displaying channels. While the Bollinger Bands start with the center line as the base, the calculation of the Donchian Channel starts with the outer bands.
The Donchian Channel is based on the highest and lowest price over a period of time. It then uses the highest high as the upper band while the lowest low is used as the lower band. This enables traders to easily identify the price range within a given time period. This allows traders to determine whether the price has consistently broken highs in an uptrend or has fallen to lower lows in a downtrend.
The center line of the Donchian Channel is simply an average of the highest and lowest lows. Simply put, the Donchian Channel is the median of the area over a period of time. This is another way of identifying the mid price and using it as a basis for the direction of the trend. Since it only takes into account two numbers, the highest and the lowest, it reacts faster than the usual moving averages. Yes, it seems a bit more jagged, but it allows for a less delayed trading signal.
Kijun Sen Line
The Ichimoku cloud indicator is one of the most accurate standalone indicators. It has a good balance of giving trading signals with high probability and at the same time not lagging behind too far.
The Kijun-Sen line is a very important part of the Ichimoku cloud indicator. It represents the medium-term trend of Ichimoku. Together with the Tenkan-Sen, traders can identify trend reversals and entry and exit points. It also enables traders to visually identify the direction of the trend.
The Kijun-Sen Line is also a simple median calculation that uses the highest high and lowest low within a given time period. It simply adds the highest high and the lowest low and divides the result by two. In a way, it's another line that represents the median of the price over a given period of time.
The MMR indicator is a custom oscillating indicator based on crossovers. Specifically, it is the difference between an exponential moving average (EMA) and a linear weighted moving average (LWMA). In a way, the MMR indicator is a crossover indicator. Instead of recording the moving averages, the information is shown in another window as an oscillating display.
The Median Price Cross Forex Trading Strategy is a crossover strategy using median lines.
The center line of the Donchian Channel represents the short-term trend while the Kijun-Sen line represents the medium-term trend. Trading signals are generated based on crossing these two center lines.
However, not all crossovers are treated as input signals. Trades should be filtered based on the trend direction of the MMR indicator.
Since the MMR indicator is essentially a crossover indicator, the median price cross forex trading strategy is in some ways a confluence of a regular moving average crossover and a median price line crossover.
- Ichimoku Kinko Hyo
Time window: 1-hour, 4-hour, and daily charts
Currency pairs: Major and minor pairs
Trading session: Meetings in Tokyo, London and New York
Buy Trade Setup
- The MMR indicator should print positive green histograms that indicate a bullish long-term trend
- The center line of the Donchian Channel (blue) should be above the Kijun-Sen line (gold), indicating a bullish trend reversal
- Place an order to buy at the confluence of the above conditions
- Set the stop loss below the Kijun-sen line
- Close the trade when the MMR indicator line drops below zero
- Close the trade when the Donchian Channel center line (blue) drops below the Kijun Sen line (gold).
Sell Trade Setup
- The MMR indicator should print negative red histograms that indicate a bearish long-term trend
- The center line of the Donchian Channel (blue) should be below the Kijun-Sen line (gold), indicating a bearish trend reversal
- Enter a sell order at the confluence of the above conditions
- Set the stop loss above the Kijun-sen line
- Close the trade when the MMR indicator line is above zero
- Close the trade when the Donchian Channel center line (blue) crosses the Kijun Sen line (gold).
This simple crossover trading strategy is a working crossover strategy. It is one that enables traders to take advantage of the market by systematically getting in and out of trades. It's not always 100% correct, but it has a relatively higher probability compared to other crossover strategies.
If you were to look at the lines individually, price tends to look at those lines individually as a stand-alone technical indicator. In a trending market, the price would rarely cross the Kijun-Sen line prematurely. When used correctly with good trade management strategies, moving stop losses to breakeven and trailing stop loss at the right time, this strategy should allow traders to be profitable more often.
Forex Trading Strategy Installation Instructions
The Median Price 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.
The Median Price Cross Forex trading strategy offers the ability to spot various peculiarities and patterns in price dynamics that are not visible 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 Median Price Cross Forex Trading Strategy?
- Download Median Price 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 Median Price Cross Forex trading strategy
- You will see that the Median Price 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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