Dema Day Trading Strategy For MT4
Table Of Contents:
- Dema Day Trading Strategy For MT4
- The Dema Day Trading Strategy For MT4 – Long positions
- The Dema Day Trading Strategy For MT4 – Short positions
- Is the Dema Day Trading Strategy For MT4 profitable?
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 Dema Day Trading Strategy For MT4 is a trend following trading system which makes use of three moving averages. In this trading strategy, the indicator used for plotting the moving averages is a custom indicator. We do not know much information about this except for the fact that it uses the setting of 20. However, traders who wish to have more control over the trading indicators can merely replace this custom indicated with three moving averages.
When one hears the use of moving averages, they are right in assuming that the trading strategy is a trend following system. This is the case with the demo day trading strategy as well. What this means is that when the markets are moving in a sideways range or when the trends are weak, the trading signals from the Dema day trading strategy might result in losing trades.
This is because of the fact that the Dema day trading strategy uses only the moving averages and the pivot level indicators. There are no other indicators to complement the signals given from the moving averages and the price action itself. This is one of the shortcomings of the Dema day trading strategy. But a quick fix for this is by simply adding your favorite trading oscillator which can be used as a timing indicator for your trades.
The Dema day trading strategy makes use of the pivot level indicators which serves the purpose of acting as potential take profit as well as entry for your trades. It is because of this indicator, that we make use of the 15 minute chart time frame. However, you can change the pivot levels to show higher level such as the monthly pivot points and switch to the higher chart timeframes.
The trading signals that you see from the Dema day trading strategy is very easy to follow. If you have ever traded with any moving averages, then trading with the demo day trading strategy is very easy and you will quickly get accustomed to the trading signals with this strategy.
Let's now take a look at how you can trade long and short positions using the Dema day trading strategy for MT4.
The Dema Day Trading Strategy For MT4 – Long positions
For long positions using the Dema day trading strategy, trader should first wait for price action to turn bullish. This is based on looking at the price action itself and its relative position to the moving averages. Ideally, the moving averages should already be signaling the bullish markets by making a bullish crossover.
The next step is to wait for price action to make a retracement back to the main moving average line which is the red moving average line. Here, after the retracement happens, you can take a long position at market straight away. Look at the recent swing low that formed and set your stop loss to this level. You will notice that your stop loss is relatively small. Now using the pivot levels on the price chart, set your target levels to these pivot points.
You could look at the pivot points that are placed above and set your take profit levels accordingly. After your first take profit level is hit, you should then move your stop loss to break even.
The Dema Day Trading Strategy For MT4 – Short positions
For short positions using the Dema day trading strategy, trader should first wait for price action to turn bearish. This is based on looking at the price action itself and its relative position to the moving averages. Ideally, the moving averages should already be signaling the bearish markets by making a bearish crossover.
The next step is to wait for price action to make a retracement back to the main moving average line which is the red moving average line. Here, after the retracement happens, you can take a short position at market straight away. Look at the recent swing high that formed and set your stop loss to this level. You will notice that your stop loss is relatively small. Now using the pivot levels on the price chart, set your target levels to these pivot points.
You could look at the pivot points that are placed below and set your take profit levels accordingly. After your first take profit level is hit, you should then move your stop loss to break even.
Is the Dema Day Trading Strategy For MT4 profitable?
The Dema day trading strategy is a fairly simple forex trading system to use. At the very core, it makes use of moving averages as the main driving force behind this trading system. Therefore, this is a trading system that we can recommend even for beginners. The pivot levels act as a good take profit levels for the trades. Therefore, it removes all subjectivity.
The one aspect that works against the Dema day trading strategy is the fact that there are no oscillators that are used in this trading system. Using oscillators can be a great way especially when trading with the moving averages. Therefore, we recommend traders to also make use an oscillator such as their relative strength index or the stochastics oscillator in order to time their trades. This will be very beneficial especially in removing false signals from the market.
Using the concepts of divergence can greatly benefit the trading signals. While this might be a bit difficult for beginners, with good practice you would be able to build this into a full fledged forex trading system. The trading template that comes with the Dema day trading strategy is relatively lightweight and therefore you can use this to monitor multiple instruments at the same time.
The demo day trading strategy is applicable only for trading on the 15 minute chart time frame. This limitation comes due to the fact that it makes use of the intraday pivot levels. However you can find a custom pivot level indicator which makes use of the how your chart timeframe such as the monthly pivot levels and switch to trading on the one hour or the four hour chart timeframe using the Dema day trading strategy.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
