Stochastic RSI with Heiken Aschi Strategy For MT4
The Stochastic RSI with Heiken Aschi Strategy For MT4 provides strong trades setup for the Forex majors. Choosing the Forex major has an immense advantage as the price of the asset is much more stable.
Investors having low confidence or lack of knowledge should trade GBPUSD, AUDUSD, USDCAD, and EURUSD pairs only. The reason to choose these 4 assets is price volatility. The volatility of the asset is much more stable and signals generated in this edge are very clear. Stochastic, EMA 8, Heiken Ashi, and the momentum indicator is used to fine-tune the trading edge.
Boosting up your skills with a trading edge is not that tough. By following some strategic rules, you can expect to win most of the trades. Statistically speaking, you can win more than 90% of the time by using this edge. As the strategy is embedded in a system, the traders have to change the settings of the indicators. It gives them a powerful indication of the trade setup provides easy means to earn money.
So, analyzing the trend is very important when the trades are taken with this method. In case, you want to take trades without analyzing key variables, you will become frustrated. This article is going to act like a life savior.
All the steps of the content will be examined in such a strategic way so that investors of all ages and skills can depend on the edge. You may know a lot about the trade execution system but managing the risk profile will play a big role in this edge. Let’s see how we can open buy and short order.
Stochastic RSI with Heiken Aschi Strategy For MT4 Long trade setup
For the long, the first step is to switch back to the candlestick chart. As the default template settings impose the line chart, people often become confused by seeing data in the line chart. Now comes the hard part which is the identification of the support. Instead of using the low of the candle, we will find support by using the highs.
It might be stunned to see this statement but after you go through this content you will get the idea. When the highs of candles are brown it becomes strong support. We all know broken resistance becomes strong support and these resistance levels are comprised of the important highs. So, draw the resistance level and see if the bulls can break above that level.
When we have a strong break of the resistance, that resistance zone will be our buying zone. At the stochastic indicator, the green line should cross over the blue line imposing a bullish signal. The volume bars should decent volatility or else we can’t take the trade.
Ignoring data from the volume indicator will result in faulty reading. For your betterment, give importance to the size of the bars in the volume indicator. If new trade is taken after analyzing the right volume bar, we should have a 90% win rate. So, follow these steps as strict sets of rules.
Stochastic RSI with Heiken Aschi Strategy For MT4 Short trade setup
Shorting the asset is not that hard. The same rule will be applied. People who have to understand the long trade concept should not have any problem with the analytical settings. But in the short trade, we will push things to the next state. Follow the key steps since we are going to teach to trade cross pairs, stocks, and indices.
A strong support level gets broken and gives us strong resistance. We know this fact very well. We have to find such a strong support level so that we can open short trade at the bullish retracement. The reason we will wait for the bullish retracement is the quality of the trade setups.
Investors who don’t have strong analytical skills should not try to trade stocks and indices as the volatility is very high. Find your broken support level and wait for the bullish rally to take place. After the bullish rally takes place, the price of the asset will hit the resistance zone and impose a great selling signal.
People who are not skilled at PA strategy won’t get a great signal. But they can wait for the bearish cross in the stochRSI indicator. The greenish signal line will fall below the blue line establishing a strong downward rally. When the bearish cross occurred reading in the volume indicator should be high. If the reading in the volume indicator is low, you should be bothered about the signal as you won’t get high RR ratio trades.
Volatility is an essential part of the trading business. In case, you intend to choose the indices, you can wait for low volatility and it should give the trader a strong clue about the potential setup in the chart. When setup is spotted, open your short trade with very low risk.
Trade management technique
Primarily we have said, this system is designed to trade the Forex majors. But in the short trade setup, we have taught you to take trades at the indices and stocks. Choosing indices and stocks increases the risk exposure and pushes the traders at great risk.
You should not take more than 1 % risk when the tradeable asset is picked from the stock or the indices list. In cases, you pick the asset from the Forex majors, you can increase the risk to 3% but don’t forget to assess the RR ratio. The minimum RR ratio for each trade should be 1:4. You may think finding such a great setup will be impossible.
Spend some time and see how the breakout of the SR level fuels the bulls and bears. This orthodox method of trading is going to make us one of the most skilled traders and we will find yourself more comfortable with the trading edge.
In case you want to know details and bring change to the existing edge, you do have the liberty to use this system in the paper trading account. The paper trading account will give you the perfect environment to open trades without any fixed sets of rules. Test different techniques and come up with a valid system so that you can use the template and trade with confidence.
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