Papaya Forex Strategy MT4 For MT4
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 Papaya Forex Strategy MT4 For MT4 is a trend reversal strategy based on the Relative Strength Index (RSI) Indicator. The zones and the levels of the RSI are used to make trading decisions.
In addition, this strategy uses a total of 15 Exponential Moving Averages and a custom Beast Super Signal indicator to produce trend reversal signals.
According to the inventor, the Papaya Forex Strategy MT4 For MT4 is a very flexible strategy that can be traded on any time frame and on all forex pairs including GOLD and SILVER.
However, please keep an eye on the trading costs (spread). On lower time frames the spread eats a lot of the trading performance. Therefore, you should aim for higher time frames and instruments with a reasonable spread.
Indicators used
Let's have a look at the Indicators used in the formation of the Papaya Forex Strategy MT4 For MT4 that helps in giving high probability trend reversal signals:
EMA (3): It is a 3-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the dodger blue color line.
EMA (5): It is a 5-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the yellow color line.
EMA (7): It is a 7-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the yellow color line.
EMA (9): It is a 9-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the yellow color line.
EMA (11): It is an 11-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the yellow color line.
EMA (13): It is a 13-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the yellow color line.
EMA (21): It is a 21-period Exponential Moving Average applied to close price. It is plotted directly on the chart in the form of the black color line.
Beast Super Signal Indicator: It is a custom-made, signal-based indicator that gives buy and sell signals in form of green and red color arrows which are plotted directly on the chart.
RSI(14) Indicator: It uses a standard Relative Strength Indicator (RSI) with a 14-period applied to close price. It is plotted on the chart in a separate window. But this strategy doesn't focus on the RSI value or RSI signal line. The RSI signal line is purposefully made hidden so that we don't get distracted or confused. Instead, the strategy focuses mainly on the RSI zones/levels since the following 8 Exponential Moving Averages are added into the same RSI (14) Indicator window to create a unique indicator which is surely not a standard RSI indicator.
The following 8 Exponential Moving Averages are been added into the same RSI (14) Indicator:
EMA (3), EMA (5), EMA (7), EMA (9), EMA (11), EMA (13), EMA (15), and EMA (30). The EMA (3) is plotted in the form of a dodger blue color line while from EMA (5) to EMA (15) all are plotted in the form of the magenta color lines. The EMA (30) is plotted in the form of a black color line.
Different zones/levels used in the RSI (14) Indicator:
90 - Resistance (Extreme Sell) zone/level marked with red color.
70 - Strong Sell zone/level.
60 - Sell zone/level.
50 - Wait zone/level.
40 - Buy zone/level.
30 - Strong Buy zone/level.
10 - Support (Extreme Buy) zone/level marked with green color.
Out of these all above zones/levels the strategy focuses mainly on Resistance (Extreme Sell) 90 zone/level and on Support (Extreme Buy) 10 zone/level. While all others are just there to indicate at which level the price is currently moving.
Let's take a look now at how the Papaya Forex Strategy MT4 For MT4 uses the above-stated indicators in combination to generate some strong trend reversal signals.
The Papaya Forex Strategy MT4 For MT4 - Long Positions (Buy Trades)
For Long Positions, when in RSI (14) Indicator all 8 Exponential Moving Averages meet at the Support (Extreme Buy) level 10 or fall below the Support (Extreme Buy) level 10, which is marked in green color. And, when the 7 EMAs with period from 3 to 15 cross the black EMA (30) to the upside then a long/buy signal is generated.
In addition, we should have a green color arrow appear before the RSI (14) signal, i.e a buy/long signal should be generated prior to the buy/long signal given by the RSI (14) indicator.
And lately, we should have the price on the chart moving above all 7 EMAs from period 3 to 21. To trigger a buy/long trade.
For EXIT:
- You can book a profit when the EMAs inside the RSI (14) indicator reaches the Resistance (Extreme Sell) level 90 (Preferred Exit).
- Or you can set a predetermined take profit level based on a 1:2 risk:reward ratio.
The initial stop loss can be below the previous swing low.
The Papaya Forex Strategy MT4 For MT4 - Short Positions (Sell Trades)
For Short Positions, when in RSI (14) Indicator all 8 Exponential Moving Averages meet at the Resistance (Extreme Sell) level 90 or rise above the Resistance (Extreme Sell) level 90, which is marked in red color. And, when the 7 EMAs with period between 3 and 15 cross the black EMA (30) to the downside then a short/sell signal is generated.
In addition, we should have a red color arrow appear before the RSI (14) signal, i.e a sell/short signal should be generated prior to the sell/short signal given by the RSI (14) indicator.
And lately, we should have the price on the chart moving below all 7 EMAs from period 3 to 21. To trigger a sell/short trade.
For EXIT:
- You can take profits when the EMAs inside the RSI (14) indicator reaches the Support (Extreme Buy) level 10 (Preferred Exit).
- Or you can set a predetermined take profit level based on a 1:2 risk:reward ratio.
According to the inventor, the initial stop loss should be above the previous swing high.
The Papaya Forex Strategy For MT4 Conclusion
The Papaya Forex Strategy For MT4 is a very interesting, easy to follow trend reversal strategy. Of course, as with every trading strategy you will still have a learning curve at the beginning.
Warning: Always trade a new trading system on a demo account for at least a few weeks. This will help to avoid costly mistakes especially at the beginning.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
