FX Daily Trend Strategy For MT4
Table Of Contents:
- FX Daily Trend Strategy For MT4
- The FX Daily Trend Strategy For MT4 – Long positions
- The FX Daily Trend Strategy For MT4 – Short positions
- Is the FX Daily Trend 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 FX Daily Trend Strategy For MT4 might give the impression of being a rather unique forex trading system. However, once you look under the hood, this trading system is nothing different from any other obscure trading strategies out there.
On the contrary, what you will realize is that the FX daily trend strategy makes use of two regular indicators and throws in a custom indicator and calls it a unique trading strategy. There is no real edge that you get from trading with this indicator.
The only indicators used in the FX daily trend strategy are on the price chart. Here, there are two Bollinger bands that are used. These are the regular Bollinger bands that you see on your trading terminal.
The two Bollinger bands tend to act as both a trend following and a volatility indicator. Long and short positions are taken based on the slope of the Bollinger band and in understanding the price action itself. It is important that traders understand how Bollinger bands work and the market information that they can convey.
The next indicator in the FX daily trend strategy is the custom trend indicator itself. This indicator is responsible for plotting the price trends on the right side of the price chart. However, there are only a few currency pairs for which the trend is shown.
We should mention that this indicator does not really offer an edge for the traders. The trends depicted can sometimes be too late, this can lead you into taking a position after price has moved a considerable part in the direction of the trend.
As we mentioned, the FX daily trend strategy is not a trading strategy at all, due to the fact of the poor choice of indicators that are used. You can either choose to ignore this trading system or you could customize this trading strategy. But using double Bollinger bands is not something unique and just about any trader knows such a method of trading. Thus, you can avoid using this trading system in the first place.
Let's now take a look at how you can trade long and short positions using the FX daily trend forex trading strategy.
The FX Daily Trend Strategy For MT4 – Long positions
In order to take long positions in the market, we wait for the general trend to be moving higher. This can be determined by either the slope of the price action or the Bollinger bands themselves. Once you see this, look for a swing low to form just before the start of the upward slope in the Bollinger band or the price itself.
Now, you should wait for price to break the middle Bollinger band. At this same time, you can look to the FX daily trend indicator. Here, the currency pair of your choice should be showing that the market is in an uptrend. However, note that this need not be the case all the time. If the market price action is showing a potential decline, then go short.
Identify the recent swing low, a few candlesticks prior to going short and set your stop loss to this level. Now, using one of the lower Bollinger bands, set your take profit level to these levels.
The FX Daily Trend Strategy For MT4 – Short positions
In order to take short positions in the market, we wait for the general trend to be moving lower. This can be determined by either the slope of the price action or the Bollinger bands themselves. Once you see this, look for a swing high to form just before the start of the downward slope in the Bollinger band or the price itself.
Now, you should wait for price to break the middle Bollinger band. At this same time, you can look to the FX daily trend indicator. Here, the currency pair of your choice should be showing that the market is in a downtrend. However, note that this need not be the case all the time. If the market price action is showing a potential decline, then go short.
Identify the recent swing high, a few candlesticks prior to going short and set your stop loss to this level. Now, using one of the lower Bollinger bands, set your take profit level to these levels.
Is the FX Daily Trend Strategy For MT4 profitable?
The FX daily trend strategy for MT4 is, in our opinion one of the poorly build trading systems. It makes use of just the Bollinger bands indicators and a custom indicator for the trend. Even this custom indicator does not work as expected as it merely shows the trend across different instruments.
The FX daily trend strategy is therefore not recommended if you are just getting around to trading. This trading system is also certainly not for the professional traders as well. Therefore, if given a chance, you can ignore this trading system for good. It does not offer any unique advantage for the trader.
For those who feel adventurous enough, you could customize this trading system. This can be done by adding additional indicators in the sub windows. The oscillators can be a great tool to help you pinpoint the trades within the trend. Using the oscillator, you would be able to understand when the markets are overbought or oversold. This can in turn help you to fine tune the entry and exit of your trades.
But as with modifying any existing trading system, adding additional indicators will potentially change the way you can trade with the current trading system. This is something that traders should bear in mind. When you add additional indicators, you should also account for potential additional signals that might come from using these trading indicators into the existing trading strategy.
Considering the above factors, the FX daily trend system is nothing but a mix of two Bollinger bands and a generic trend information indicator. There is nothing unique about this and traders are better off using other trading systems that work better.
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