Many traders want to trade a strategy with a high win rate. While this isn't the only way to pursue a profitable trading strategy, it is one of the most viable ways to profit from the market. It enables traders to win consistently, which allows them to be in a more relaxed state when trading. But how do you get a strategy with a high win rate?
Confluence is probably one of the most logical ways to be consistent in the marketplace. This is because the likelihood that a trade will be profitable increases when there are many different analyzes that indicate the same direction of trade. It's like asking a group of people which direction to go to a certain place. The more people are pointing in the same direction, the more likely you are to get in the right direction. While this is not foolproof, trading in confluences leads to profits in the long run.
The Squeeze Trend Forex trading strategy is a strategy that highlights the confluences of trading direction using multiple moving averages and a combination of commonly used indicators that work well as a standalone indicator as well.
The Guppy Multiple Moving Averages (GMMA)
The Guppy Multiple Moving Averages (GMMA) was developed by Daryl Guppy, an Australian trader. It was supposed to show how a series of moving averages can indicate a trend.
The original GMMA consisted of 12 moving averages. It has been broken into two sentences, a short term and a long term rate. The short term set consisted of moving averages with periods 3, 5, 8, 10, 12 and 15, while the long term set consisted of 30, 35, 40, 45, 50 and 60.
These moving averages could be used to interpret the trend in different ways. It could be used to identify trend direction based on the stacking of the moving averages. When the short term moving averages are above the longer term moving averages, the market is considered bullish. If it was the other way around, the market is considered bearish.
It could also be used to identify trend strength. When the moving averages expand, the trend is said to be strong, while the trend could weaken if the moving averages contract.
Finally, trend reversals based on the crossover of the short-term and long-term rates could also be identified. A cross above would be considered a bullish reversal while a cross below would be a bearish reversal.
Bollinger Squeeze with MACD indicator
The Bollinger Bands are one of the most popular indicators among many traders. This is likely due to the many different ways the Bollinger Bands could be used. It is a moving average that makes it possible to be used as a trend following indicator. It is also an oversold and overbought indicator that many medium reversal traders use. On the other hand, it could also be used as a momentum indicator if you were trading towards the overbought and oversold areas.
However, there is another way to use the Bollinger Bands that many new traders may not be familiar with. In addition to the above, the Bollinger Bands are also an indicator of volatility. The bands tend to contract in a period of low volatility and expand during a period of high volatility. Markets are usually a cycle of contractions and expansions. What follows a contraction phase is usually an expansion phase. Trading on the edge of the contraction phase just before the expansion phase is a high reward trading strategy because of the speed at which the price could move.
The moving average convergence and divergence indicator is also a widely used indicator. It is basically a modified moving average cross based on a difference of two moving averages and their relationship to another moving average considered a signal line. The MACD is a commonly used oscillating indicator that can be displayed either as histograms or as two crossing lines.
The Bollinger Squeeze with MACD Indicator is a custom indicator that provides signals of the confluence of a Bollinger Squeeze and MACD reversal condition.
Trading strategy concept
This strategy aims to take profit from the market by trading at the confluence of the long-term rate of the Guppy Multiple Moving Average and the Bollinger Squeeze with MACD indicator. The long term rate of the Guppy Multiple Moving Average consists of six moving averages. Add to this the confluence of the Bollinger Squeeze and MACD reversals. We get a strong confluence of many indicators combined in this strategy.
To trade this strategy we would have to act in the direction of the long term trend of GMMA. Then we wait for the Bollinger Squeeze with MACD indicator to show a signal that is in line with the GMMA trend. This would usually result in a trade that would result in a profit.
Time window: preferably 1-hour and 4-hour charts
Currency pairs: Major and minor pairs
Trading session: Meeting in Tokyo, London and New York
Buy (Long) Trade Setup
- The GMMA_Long indicator should have a green moving average above and a brown moving average below, indicating a bullish long-term trend
- Wait for the my_squeeze_light indicator to print a lime histogram bar, indicating that Bollinger Band Squeeze and MACD are converging, indicating a bullish market condition
- Place an order to buy at the confluence of the rules above
- Set the stop loss on the fractal below the entry candle
- Close the trade as soon as the my_squeeze_light indicator prints either a blue or red histogram bar, indicating that the bullish confluence has ended
Sell (Short) Trade Setup
- The GMMA_Long indicator should have a brown moving average above and a green moving average below, indicating a bearish long-term trend
- Wait for the my_squeeze_light indicator to print a red histogram bar, indicating that the Bollinger Band Squeeze and MACD are converging, indicating a bear market
- Enter a sell order at the confluence of the above rules
- Set the stop loss on the fractal above the entry candle
- Close the trade as soon as the my_squeeze_light indicator prints either a blue or a lime histogram bar, indicating that the bearish confluence has ended
This strategy is a high probability trading strategy. This is due to the fact that many indicators flow together and point in the same direction. In most cases the trade would be profitable. Most trades would go for profit and, if properly managed, should result in a profitable trade.
However, there are cases when the price would not push strongly enough towards trade. However, the key to profiting from this strategy is to move the stop loss into profitability once the price has moved in your direction.
Forex Trading Strategy Installation Instructions
The Squeeze Trend 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.
Squeeze Trend's forex trading strategy provides 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 Squeeze Trend Forex Trading Strategy?
- Download Squeeze Trend 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 Squeeze Trend Forex Trading Strategy
- You will see that the Squeeze Trend 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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