In this article I want to provide you with the rules and features of trading on the next trend system for the Forex market, called - Forex Archer.
The Forex Archer strategy, as mentioned at the beginning, is a manual trend system, that is, we will open deals on it only along the trend, and the trend direction itself, respectively, will be determined both using the older time period and using technical indicators.
For trading on Forex Archer, you can use different currency pairs, but preferably with the US dollar, these are:
EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and others.
Suitable timeframes for trading on the Forex Archer system are: М15, М30, Н1, Н4. But remember, as in all other strategies, that the shorter the time period, the greater the number of false signals. Optimally for trading, we will use the H1 period; accordingly, the trend checks on a higher timeframe will be D1.
Let's take a quick look at what indicators are included in the Forex Archer strategy? The main ones among them are standard technical tools that are included in the MetaTrader 4 trading terminal toolkit.
1. So, the first one is the Heiken Ashi indicator - one of the standard tools in the terminal, which uses specially modified bar opening prices, its max / min and closing price.
2. Two moving averages (slow and fast MA) with periods of 21 and 86, respectively, and the construction method is exponential.
3. The Momentum indicator has a period of 8 and is applied to the close of candles. To identify trends on this oscillator, we use the level 100. Anything above this level is a signal for an upward trend, what is below - a downtrend.
4. Stochastic Oscillator with periods (8,3,3), MA construction method is simple.
Well, we figured out the features, characteristics and indicators, now we proceed to describe the rules and conditions for opening market orders using the Forex Archer trading system.
Before trading according to the strategy, we determine the current trend direction on the higher timeframe, i.e. on D1. To do this, you can use any method of determining the trend in the market. After that, if the trend is up, then on the working timeframe (H1) we are looking for buy signals only, if the trend is down, then only sell signals.
So, to open market buy orders, the following trading conditions must be met on the market:
All entry conditions must be met simultaneously! At the same time, the protective stop loss is set at the nearest levels of local extrema. When using take profit, the author of the strategy recommends setting it at support and resistance levels, when the price approaches these levels, close the open position in parts, and gradually pull the stop loss to breakeven.
For the implementation of market short positions (deals on Sell), the opposite conditions apply:
We set stop loss and take profit orders in the same way as for long trades.
When trading Forex Archer, also consider the timing of important economic news, as the price during this period may behave inexplicably. It is recommended to suspend trading for half an hour before the exit and after the release of news on the currency included in the pair you are trading.
You can also use the Forex Archer strategy without first defining a trend on an older timeframe, and trade only on one timeframe. With this approach, it is also worth using the following filters for a preliminary exit from an open position:
Trading according to the second option, the system will have more signals to enter the market, but, accordingly, more false and unprofitable moments. It is best to test this option first on the strategy tester and, if necessary, make your own modifications.