Momentum Moves are one of the highest return entries in trading. There are many cases where momentum moves right at the beginning of a trend that will continue for some time. These are the types of trades that can generate returns that are more than a hundred percent of the risk you are risking. Whenever we run one of these trades, we often see my profits go. However, if we miss one, we take a back seat because we didn't take the deal.
This strategy is a trend reversal strategy that takes into account the dynamics of a trade. This is done using an indicator that reflects the dynamics behind a movement.
The drive indicator
Drive is a custom indicator that takes dynamics into account. This is based on the difference between the difference between high or low and open or closed. The custom drive map consists of two lines (top and bottom). The high line is a green colored line that is plotted based on the average of the difference between the high and open and the near and low lines. The bottom line, which is the red line, is plotted based on the average of the difference between open and low and high and closed.
If you look at this equation, you will find that the indicator measures how far the price is from its starting point while taking both directions into account. If you thought about it, this is the dynamic. Momentum is basically a market move that has caused price to be quite a long way from where it started.
With this indicator, traders can objectively assess whether a market movement is dynamic or not.
The ASC trend indicator
The ASC trend indicator is a trend following indicator that can be used to precisely determine the exact entry points. The ASC trend indicator identifies trend reversals and conveniently places an arrow on the candle where it detects a trend change. Bullish trend signals are shown as yellow upward pointing arrows, while bearish trend signals are shown as magenta downward pointing arrows.
The ASC trend indicator is a derivative of the William Percent Range. This indicator also takes into account the highest high, the lowest low and the near one. Although it has a different formula, given the parameters considered, it is still another way to measure momentum.
The Trend Magic indicator
Trend Magic is another trend that follows a custom indicator. This indicator shows the trend based on the change in the color of the drawn line. Whenever the line is steadily rising, the Trend Magic indicator will print a blue line. On the other hand, a red line will be printed when the Trend Magic indicator line is falling.
The Trend Magic indicator is an indicator that takes into account two good indicators, the Commodity Channel Index (CCI) and the Average True Range (ATR).
Trading strategy concept
The Trend Drive Forex trading strategy is based on the confluence of these three indicators. The previous two indicators, Drive and ASC Trend, put more emphasis on dynamics, while the Trend Magic indicator serves as a filter and confirmation.
The first thing we'll look for is the crossing of the lines on the drive indicator. In a bullish setup, we will look for the green line that is above the red line. A bullish setup would be the opposite of that.
Then we would also look for the Trend Magic indicator that coincides with the direction of the Drive indicator. Blue lines indicate an upward trend while red lines indicate a downward trend.
Finally, we are waiting for the ASC trend indicator to print an arrow in the direction of the Drive and Trend Magic indicators. This will serve as our final trade entry signal.
There will be cases where only one or two of the three conditions are met. These situations are not yet a clear trend change so we should ignore these scenarios and wait for a proper trading configuration.
- Trend magic
Time window: 15-minute, 30-minute, 1-hour, and 4-hour charts
Currency pair: each major and minor pair plus a few crosses
Trading session: any
Buy (Long) Trade Setup
- The green line on the drive indicator should be above the red line
- The Trend Magic indicator should change to blue
- The ASC trend indicator should print a yellow arrow pointing up
- Open an order to buy at the confluence of these terms
- Set the stop loss below the Trend Magic indicator line
- Close the trade when the Trend Magic indicator turns red
- Close the trade when the green line on the drive gauge drops below the red line
Sell (Short) Trade Setup
- The green line on the drive indicator should be below the red line
- The Trend Magic indicator should change to red
- The ASC trend indicator should print a downward magenta arrow
- Open a sell order at the confluence of these terms
- Set the stop loss above the Trend Magic indicator line
- Close the trade when the Trend Magic indicator turns blue
- Close the trade when the green line on the drive indicator crosses the red line
This strategy is a high probability strategy with the potential to capture large trending movements. This is due to the dynamic that is typically behind trading. If you noticed the trade configurations, you would see that the entries are either full-bodied candles with short wicks or that there is a full-bodied candle with short wicks in front of the entry candle. This is usually a little close to where the drive indicator crosses. However, in hindsight, these candles will seem insignificant as the market gains volume in the direction of the trend.
The setups usually had a time when the trade was profitable. It is important to get a sense of when to move the stop loss to breakeven as there are times when the market would reverse after the momentum move.
Forex Trading Strategy Installation Instructions
The Trend Drive 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 Trend Drive Forex Trading Strategy offers the ability to spot various peculiarities 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 Trend Drive Forex Trading Strategy?
- Download Trend Drive 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 trading chart and hover over “Template”.
- Move right to select Trend Drive Forex trading strategy
- You will see Trend Drive Forex trading strategy 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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