Power Bands Trading System For MT4

Power Bands  Trading System For MT4

The Power Bands Trading System For MT4 is a trend following trading strategy where we should focus on the price where prominent investors and traders dominate the price. Later on, this strategy focuses on fewer candles to follow the higher timeframe's market trend. Moreover, this strategy uses other trading indicators like the Bollinger Bands to ensure the accuracy of trades.


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The Power Bands Trading System For MT4


The trend is the most potent market condition in the forex market, where the price makes higher highs and lower lows aggressively. In retail trading, most of the trading strategies work well when the price is within the trend. Therefore, if we can define the market trend, we can increase trading accuracy.

Before proceeding further about the trading strategy, let's have a look at trading tools in this trading system:


  • Bollinger Bands- value (250, 2)

  • Simple Moving Average (SMA)- value (250 low)

  • Simple Moving Average (SMA)- value (250 high)

  • Exponential Moving Average (EMA)- value 80

  • Stochastic Oscillator- value (100, 3, 3)


When you plot these indicators in the chart, it will show like this:




Let's have a look at the meaning of all these indicators:

The Bollinger bands are profitable trading indicators that define the market context, whether it is moving within a strong trend or not. The Upper Bands and Lower Bands will expand if the price moves aggressively. Conversely, the Upper and Lower Bands will squeeze to the price to show the price's corrective momentum.

Moreover, the Upper and Lower Bands work as a dynamic support and resistance level. If the price moves above these levels, it creates further trend continuation possibilities in the price.

On the other hand, the moving average is a widely recognized trading indicator that shows the overall market sentiment in the price.

In this trading strategy, if the price moves above the SMA 250, the long term trend is bullish. Similarly, if the price moves below the SMA 250, the overall trend is bearish.

In this way, we can determine the long term view of the price and focus on short-term trades from the EMA 80. When SMA and EMA provide the same market direction, we will enter the trade.

However, the forex market is an uncertain market where we cannot determine the exact trading volume. Therefore, it is very crucial to increase accuracy by implementing an Oscillator with the leading indicator.



What is the Stochastic Oscillator?


Stochastic is a profitable trading indicator that shows the average market sentiment with a dynamic line. The Stochastic lines move from the zero to 100 level, where above 80 levels are considered extreme bullish conditions from where the price is expected to reverse.

Conversely, when the price moves below the 20 levels, it is expected to move higher in the coming days.

Moreover, we can determine the trend continuation with the Stochastic Oscillator. If the Stochastic moved from 30 to above 50 levels, the bullish trend is expected to continue. Similarly, the bearish trend is expected to continue when the Stochastic moves below the 50 level.

In The Power Bands Trading System For MT4, we will get the long term and short term view of the price, and before taking the trade, we will increase the probability by using the Stochastic Oscillator.



Bullish Trading Strategy


The bullish trading strategy using the indicators mentioned above applies to any financial market. Therefore, you can apply it in any currency pairs, including the EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, or GBPJPY.

There is no specific timeframe for this strategy. Therefore, you can apply it in any timeframes from 15 minutes or above. If you want to build an intraday trading strategy, you can use it in m15 or m30 timeframes. Otherwise, for swing trading, you can apply it as H1 or h4 timeframes.



Bullish Trading Indications


  • The price is moving up by creating higher highs, and it moved above the SMA 250 to indicate that the long term trade is bullish.

  • EMA 80 moves above the SMA 250, indicating that the short-term trend is more reliable than the long term trend.

  • The Stochastic Oscillator moved above the 60 lines, indicating further indication of the bullish trend.




Entry


After confirming all trading conditions, wait for the price to ensure the bullish trend with a bullish candle. Later on, enter the trade as soon as the bullish candle closes.



Stop Loss


In this trading strategy, the SMA 250 (low) and SMA (250) high will determine the possible stop loss level.

Therefore, in the buy trading strategy, put the stop loss 10 to 15 pips below the SMA 250 (low).



Take Profit


Every trading system will provide a good number of trades if the risk vs. reward is profitable. Therefore, this strategy's ideal take profit level will be based on the 1:2 risk vs. reward ratio.



Bearish Trading Strategy


The bearish trading strategy applies to any financial market. Therefore, you can use it in any currency pairs, including the EURUSD, GBPUSD, USDJPY, AUDUSD, USDCHF, or GBPJPY.

Moreover, you can apply it in any timeframes from 15 minutes or above. Therefore, you want to build an intraday trading strategy to use it in m15 or m30 timeframes. Otherwise, for swing trading, you can apply it as H1 or h4 timeframes.



Bearish Trading Indications


  • The price is moving down by creating lower lows, and it moved below the SMA 250 to indicate that the long term trade is bearish.

  • EMA 80 moves below the SMA 250, indicating that the short-term trend is more reliable than the long term trend.

  • The Stochastic Oscillator moved below the 40 lines, indicating further indication of the bearish trend.




Entry


After confirming all trading conditions, wait for the price to ensure the bearish trend with a bearish candle. Later on, enter the trade as soon as the bearish candle closes.



Stop Loss


In this trading strategy, the SMA 250 (low) and SMA (250) high will determine the possible stop loss level.

Therefore, in the sell trading strategy, put the stop loss 10 to 15 pips above the SMA 250 (high).



Take Profit


Every trading system will provide a good number of trades if the risk vs. reward is profitable. Therefore, this strategy's ideal take profit level will be based on the 1:2 risk vs. reward ratio.



Conclusion


The Power Bands Trading System For MT4 is a profitable trading system with a long history of providing stable account's growth.

However, the main drawback of this trading strategy is volatility. When the price is uncertain due to unexpected market conditions, you should use lower lots to eliminate the risk.


Download the complete system description and the files here:

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