5min The Force basic setup Trading System For MT4
Table Of Contents:
- 5min The Force basic setup Trading System For MT4
- Selecting the trading instrument
- 5min The Force basic setup Trading System For MT4 - Long trade setup
- 5min The Force basic setup Trading System For MT4 - Short trade setup
- Trade Management
- 5min The Force basic setup Trading System For MT4 - Conclusion
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The 5min The Force basic setup Trading System For MT4 utilizes the market momentum with the help of advanced tools. As the name suggests, traders should use this strategy only in the 5-minute chart. MACD (12, 26, 1), Stochastic: 5, 3, 3, EMA: 5 to the close, and EMA: 5 to the open are the key indicators used to construct this unique trading strategy. After placing the required indicators in the platform data folder, you can load up the template to get your desired trade signals. In the main chart, you see the pivot levels and these levels are going to act as your prime trading zone. If any traders intend to draw the support and resistance level, there is no restriction.
The blue and brown color moving average will act as the dynamic SR level. In an obvious uptrend, the blue moving average will hover above the brown EMA. On the contrary, when the trend is down, you should see the blue EMA below the brown EMA. To get analyze the quality of the signal, we will be using the stochastic and colored MACD indicator. Note that, we will not use the stochastic in a traditional way. In this guide, you will learn the advanced use of the stochastic indicator. Since you have the basic knowledge about your trading environment, let’s dive into details and learn the INS and OUT of the 5min The Force basic setup Trading System.
Selecting the trading instrument
The novice traders have a misconception that any strategy can be used to take the trades. Have a look at the experienced traders. Most of them are using the specific trading method to trade certain trading instruments. To maximize the efficiency of the 5min The Force basic setup Trading System, we have to know the proper way to select our trading instrument. Traders who want to walk in the easy path should trade the EURUSD and GBPUSD pair only. And they must look for the trade signals during the European or the New York trading sessions. But this doesn’t mean you won’t be able to trade other currency pairs with this unique strategy.
To trade other currency pairs, you have to consider the spread, trend, and sentiment of the market. Since the 5-minute chart is used in the data analysis process. The second to consider is the prevailing trend. If the angle or slope of the EMA is flat, you can consider the market is going through a consolidated period. And taking trades in the state of consolidation is a bit risky when the 5-minute chart is used. The last thing to consider for picking up the right asset is the market sentiment. Before any major economic events tension prevails in the investor’s community. This is reflected in the chart in form of noise and false spike. So, avoid picking an asset that is most likely to become volatile due to the release of major news. Now let’s learn about the trade execution process.
5min The Force basic setup Trading System For MT4 - Long trade setup
We have already pointed out that we will take the trades along with the trend. Find a bullish trend by analyzing the position of the highs and lows of the market. You can also consider the position of the EMA lines. Blue EMA is supposed to stay above the brown EMA most of the time in a typical uptrend. The price eventually retraces back towards the pivot level and bounces off forming a doji or bullish pin or engulfing pattern. Wait for the price to break above the brown and blue color EMA. Once it does, you have the initial confirmation to execute the long trade. But we need to reinforce our potential trade signal by using the MACD and stochastic indicator.
As the price breaks above the EMAs, you should see a bullish cross in the stochastic indicator. The blue lines in the stochastic indicator will cross above the brown dotted line near the oversold zone. Note that level 20 in the stochastic indicator is knowledge and the oversold zone. At the MACD indicator, you should see a dark blue histogram above the 0.0 line. Open your long trade with 1-2% risk. Set the SL to 6 pips and the TP will be set to the nearest pivot levels. Note that, you must maintain a minimum 1:2+ risk to reward ratio while using the 5min The Force basic setup Trading System.
5min The Force basic setup Trading System For MT4 - Short trade setup
Everything about the 5min The Force basic setup Trading System was easy extremely easy so far. Now, we will make things a bit complex by introducing some advanced techniques to use the indicator data. First of all, we have to find the bearish rejection at the pivot level. In the ideal case, the pivot level should match with the EMA lines. Finding trade signals that formed at the merging point of EMA and pivot lines tends to have a higher success rate. For the final confirmation, we will be taking readings from stochastic and the MACD indicator. Look for the bearish cross in the stochastic signal line near the overbought zone. Consider 70-80 level as the overbought zone. And anything above 80 levels should be considered as the extremely overbought state of the market.
For the final confirmation, we will analyze the data from the colored MACD indicator. There should be blue or aqua color histogram bars on the negative side of the reference line. Note that if you intend to take the short trade at the break of the major support level, the stochastic signal line might be still near the 20 levels. But at the MACD reading, you will get big bars below the reference line. Execute the short trade with 6 pips stop and set the take profit to 15 pips. You can also use the reference pivot point to find the support zone and increase the potential take profit.
Those who have paid close attention to the instructions must have realized the importance of risk management policy. Since the trades are taken with a tight 6 pip stop, it is important to analyze the lot size properly. If you increase the lot size in an irrational way, you may lose more than 3% of your balance even with 6 pip Sl. You have to remember, the maximum risk you can take per trade is 2% of the capital. And if you have the tendency to open multiple trades, the overall risk should be capped by the 3% rule of money management.
Though the 5min The Force basic setup Trading System provides powerful solutions to the retail traders, still losing trades are inevitable. The only way to protect the trading capital is by following risk management rules. You have to be disciplined with your actions and carefully control the urge to open new trades. If you ever develop the habit of overtrading, the system is not going to be in any use. So, do not take more than 3 trades per day while using this amazing strategy.
5min The Force basic setup Trading System For MT4 - Conclusion
Successful investors always prefer to focus on quality trade execution. Just because you can take 3 trades per day doesn’t mean you have to open trades every day. Analyze the market condition without any bias and see if you truly see any trade signals. The market will be always present and there is no reason to rush. Those who have strong endurance and patience level, usually do well with this amazing 5min The Force basic setup Trading System. And do not forget the fact, every system gets better with small revisions once in a while.
You might be thinking that revising the trading strategy is a tough task. By the term revision, we are referring to different techniques to analyze the data reading from the indicators. For instance, instead of considering the 20 levels in the stochastic indicator as a selling zone, you can take advantage of the extreme selling pressure to trade a major break of the support. However, you can still manage to win more than 80% of the time just by following the mentioned steps in this guide.
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