Often times the market seems difficult to decipher. It is often difficult to predict which direction the market is headed. However, when you think about it, the market only moves in two directions, up or down. And often the market has a trend that shows us which direction the market is more likely to go. It's not perfect, but the likelihood of the trade direction being correct would be higher if we were trading with the flow of the market. The question is how do we get the right trend direction.
The Yang Trader main indicator
Yang Trader's main custom indicator is one of the indicators that can indicate which direction the market is moving in general. The indicator itself is based on a modified moving average. It draws a single line on the chart that slopes up and down as the market changes direction. However, this indicator has one more feature that shows the direction of the trend even before the market actually changes the direction of the trend. This is done by printing arrows that point in the direction of the market. The arrows are printed a little earlier than the actual moving average reversal. This usually also occurs when a momentum candle is going in the opposite direction or when multiple candles have pushed price in the opposite direction. These arrows act as an early warning and let us know that the market may reverse the trend.
The William 36 Histogram Waller Test Indicator
The William 36 Histogram Waller Test custom indicator is an oscillating indicator that also identifies trend direction. It is a limited oscillating indicator that can be used to print the histograms from -50 to +50. This indicator also has a mark at +/- 15 that traders can use to determine if the trend has actually started or if a candle has enough momentum to change the direction of the trend.
Trading strategy concept
This strategy aims to use the main indicator of the yang trader as an early warning device and to show which direction we should look for a trade. Once an arrow appears, we would be preparing to trade if the trend actually changes. This should go hand in hand with keeping the price on the correct side of the modified moving average line and keeping the moving average in the direction of the trend. When there is an upward pointing arrow on the chart, it is a sign that the market may be bullish. Then the price should stay above the modified moving average line and the moving average line should rise. On the other hand, if an arrow appears pointing, the opposite should also happen. The price should stay below the modified moving average line and the moving average line should decline.
The trend change should be confirmed by the William 36 Histogram Waller Test indicator. When the price reverses, the histogram bars cross over the center line. However, this does not confirm the dynamics of the trend change. To confirm the trend change, we would have to wait for the histogram bars to cross the +/- 15 mark. If the trend is bullish, the histogram bar should cross above +15. If the market is bearish, the histogram should cross below -15. This would serve as our entry signal.
The stop loss would be placed on either the high or low of the entry candle. This would be a tight stop loss but since we are trading momentum setups an aggressive stop loss would be good. The take profit target would also be a conservative 1.5 times the risk for the stop loss. This allows the trade to have a higher probability even with a tight stop loss.
- YangTraderMain (default settings)
- William36WallerTest (default settings)
Time window: 5-minute, 15-minute, 30-minute, 1-hour, 4-hour, and daily charts
Currency pair: Every major and minor pair as well as some crosses with sufficient volatility
Trading session: any trading session if it is in the higher time frame; Lower periods should apply to volume sessions
Buy (Long) Trade Setup
- The YangTraderMain display should print an arrow up
- The modified moving average line should bend
- The price should stay above the modified moving average line
- The William36WallerTest indicator should start printing positive histogram bars
- Enter a purchase order as soon as a histogram bar is above +15
- Set the stop loss a few pips below the low of the entry candle
- Set the take profit target to 1.5 times the risk of the stop loss
Sell (Short) Trade Setup
- The YangTraderMain display should print a down arrow
- The modified moving average line should turn down
- The price should stay below the modified moving average line
- The William36WallerTest indicator should start printing negative histogram bars
- Enter a sell order as soon as a histogram bar is below -15
- Set the stop loss a few pips above the high of the entry candle
- Set the take profit target to 1.5 times the risk of the stop loss
This strategy is a momentum based strategy that uses the YangTraderMain indicator as the trend direction filter and the William36WallerTest indicator as the basis for the momentum entry. This strategy is not perfect, there will be some losses due to the tight stop loss. However, due to the fixed 1.5x reward-risk ratio, the strategy should allow a positive outlook in the long term.
The key to this strategy is to capture the right trend with a strong dynamic behind it.
Forex Trading Strategy Installation Instructions
The Yang Trader 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.
Yang Trader's forex trading strategy provides 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 Yang Trader Forex Trading Strategy?
- Download Yang Trader 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 the Yang Trader Forex Trading Strategy
- You will see that the Yang Trader 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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