Technical cross foreign currency trading technique

Crossover strategies are one of the most basic trading strategies available to traders. New traders often came across a crossover strategy in the first phases of their trading careers. Many would try to experience some wins and some losses. The problem is that new traders often experience the inevitable drawdown that crossover strategies have. The thing is, crossover strategies are not highly likely trading strategies. However, crossover strategies are characterized by the fact that they express a strong trend from start to finish. This enables a strategy with a high reward risk.

The Technical Cross Forex trading strategy uses a crossover strategy with the ability to capture trading setups with high reward risk and follow the trend from start to finish. This is done using a number of technical indicators that can serve as the basis for crossovers.

100 pips momentum BO

The 100 Pips Momentum BO custom indicator is an indicator based on a modified moving average. It consists of two moving averages, a fast and a slow one. These two modified moving averages alone could be used as inputs to a crossover strategy. This indicator is particularly suitable for determining short-term trends. However, given the short-term nature of this indicator, it is very susceptible to losses in troubled markets and short retracements that conflict with a larger trend.

Execute line

The Execute Line is a custom indicator that is also based on a modified moving average. It consists of a single modified line with a moving average, the color of which changes depending on the slope of the moving average. Although it only has a moving average, this indicator could also be an independent entry signal for the trend reversal. This is because one way to determine the direction of the trend is to have a moving average slope. If the direction of the slope changes, it could be argued that the trend has changed direction.

Sliding average convergence and divergence

Moving Average Convergence and Divergence (MACD) is a widely used technical indicator. It is a trend-following momentum indicator that is based on a series of exponential moving averages and is presented as an oscillating indicator. The MACD line is based on the difference between a fast moving average and a slower moving average. The MACD line is then paired with a signal line which is still an exponential moving average but is usually faster than the two lines. The difference between the MACD line and the signal line could also be recorded as a histogram. Whenever the MACD line and the signal line cross, the histogram, which represents the difference between the two, also crosses the center line. These crossovers are typically viewed as input signals.

Although crossovers based on the MACD are typically viewed as an input signal, some crossovers are more likely to succeed than others. This is because the MACD line and the signal line normally return to the mean, which is the center line. Bullish crossovers that occur below the midline usually have a higher success rate than bullic crossings that occur above the midline. In the same way, bearish crossings above the midline would have better chances of success than bearish crossings below the midline.

Trading strategy concept

Given the concept behind the MACD, we can say that entry strategies based on the MACD can also be seen as a crossover strategy for moving averages, since their lines are derived from moving averages. These input signals from the MACD would be one of our confirmations and filters.

The second confirmation would be to cross the 100 Pips Momentum BO lines and the Execute Line. Bullish setups should precede the 100 Pips Momentum BO lines that cross over the Execute Line. Bearish setups would precede the 100 Pips Momentum BO lines that cross below the Execute Line.

The final input signal would be to change the color of the Execute Line. This represents the change in the slope of the moving medium-term average, which also confirms the change in the trend.

Indicators:

  • 100pips Momentum_BO
  • (T_S_R) – Execute line
  • 2line_MACD
    • Fast MA period: 20
    • Slow MA period: 36
    • Signal MA period: 27

Time window: 15-minute, 30-minute, 1-hour, 4-hour and daily charts

Currency pair: each pair of major and minor plus a few crosses

Trading session: any

Buy (Long) Trade Setup

entry

  • The solid blue line of the MACD should cross over the broken red line below the center line
  • The MACD should print positive histogram bars
  • The lines of the 100 pips momentum BO indicator should cross over the execution line
  • The execution line should turn yellow
  • Enter a buy order at the confluence of these terms

Stop loss

  • Set the stop loss below the Execute Line

output

  • Close the deal when the MACD starts printing negative histogram bars
  • Close the trade when the 100 Pips Momentum BO lines cross below the Execute line

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Sell ​​(Short) Trade Setup

entry

  • The solid blue line of the MACD should cross below the broken red line above the center line
  • The MACD should print negative histogram bars
  • The lines of the 100 pips momentum BO indicator should cross below the execution line
  • The finishing line should be colored in magenta
  • Enter a sales order at the confluence of these terms

Stop loss

  • Set the stop loss above the Execute Line

output

  • Close the deal when the MACD prints positive histogram bars
  • Close the trade when the 100 Pips Momentum BO lines cross over the Execute line

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Conclusion

This strategy uses custom indicators based on moving averages as elements for a crossover strategy. These custom indicators are a standalone entry signal that can be used as the focus of a strategy. By using these indicators and setting them up as complementary indicators, we get a crossover strategy with an improved win rate.

Although this crossover strategy has an improved win rate compared to other standard crossover strategies. It is still vulnerable to the inevitable drawdown periods that crossover strategies have in common. Nevertheless, traders can be profitable due to the possibility of high reward risk trades, as traders could follow a trend from start to finish with this strategy.


Installation instructions for forex trading strategies

The Technical 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 Technical Cross Forex Trading Strategy offers the possibility to recognize various peculiarities and patterns in price dynamics that are not visible 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 Technical Cross Forex Trading Strategy?

  • Download Technical 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 Technical Cross Forex Trading Strategy
  • You will see that the technical 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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