Trend following Trading System For MT4

Trend following Trading System 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 Trend following Trading System For MT4 helps the retail traders to trade in favor of the existing trend. Though some of you may think the trend trading system is complex, after going through this guide, you will realize the trend trading strategy is relatively easy. 

According to the inventor of this strategy, rookie and intermediate traders should use this trading method to trade the major pairs only. But experienced traders can use strategy to deal with all currency pairs.


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Is Trend Following System Profitable?

No one can say that a certain trading system is going to generate a consistent profit. The trader has to sync with the trading system and bring slight changes to the system based on the dynamics of the market. Even after doing all the hard work, a trader has to prepare himself to deal with the losing trades. However, if a retail trader follows the guidelines in this system, he should be able to find a profitable trading spot. Still, the success of a system greatly depends on the trader's skills, actions, and discipline. 

 

The Trend following Trading System For MT4

In this system, we will be using some common indicators. Usually, you can learn the functions of this indicator by trading the market in the demo account.

Let's have a look at the indicators used in this system.

  • Exponential Moving Average (EMA) 176 (blue)
  • EMA 144 (red)
  • EMA 44 (green)
  • EMA 36 (orange)
  • Awesome Oscillator
  • Moving Average Convergence and Divergence (MACD)



 

In this trading strategy, EMA 176 and EMA 144 will represent the existing trend of the market. If EMA 144 and EMA 176 move in the same direction, we may assume the existing trend is strong. But for the trade execution process, we will be using the EMA with the lower period.

EMA 44 and EMA 36 is more like short term trend identifier. So, we have to find the potential buying and selling signal by using these two EMA.

To execute a trade, all 4 EMAs should move in the same direction. The Awesome Oscillator and MACD indicator will be used to analyze the quality of the trade signals.

The Awesome Oscillator (AO) and MACD will show the strength of the buyers and sellers with the help of a simple histogram. If the histogram bar is formed on the top of the reference line, you should be expecting a bullish movement. On the contrary, if the histogram bar is formed at the negative side of the reference line, you should be taking the short trade.

 

Trend following Trading System For MT4 - Bullish Trade Setup

As rookie traders, we should be looking for the trade signals in the major currency pairs. The trade signals should be analyzed in the 15M or 30-minute chart. However, if you intend to trade like a swing trader, you can use this strategy to trade the H1 or H4 time frame.

 

Bullish Trade Conditions

  1. EMA 144 should be above the EMA 176
  2. EMA 36 should above the EMA 44
  3. Awesome Oscillator should have green histogram bars
  4. MACD Histogram should be above the zero lines.



Entry

After meeting the conditions mentioned above, wait for a bullish candle to appear near the EMA 36. If the bullish candle closes above EMA 36, we can execute the long trade.

 

Stop Loss

The stop loss can be set by evaluating the major support level. For this method, you can also use the 144 EMA as a reference support line. But avoid taking the trades if the SL exceeds 30 points.

 

Take Profit

The take profit is determined by analyzing the nearest resistance level. We can also multiple the SL price with factor 2 so to find the safe exit point for the trade. In short, we need to maintain a minimum 1:2 risk to reward ratio.

 

Trend following Trading System For MT4 - Bearish Trade Setup

 For the bearish trade signal, we need to check 4 conditions. If the market respects these 4 conditions you can take the short trade.

 

Bearish Trade Conditions

 

  1. EMA 144 should be below the EMA 176
  2. EMA 36 should be below the EMA 44
  3. Awesome Oscillator should have  Red histogram bars
  4. MACD Histogram bar should be below the zero lines.



Entry

After checking the required condition, we can take the short trade with low risk. But if we have any major news release within the next 1 hour, it is better to avoid taking the trades. High impact news can create intense volatility in the market and thus the risk factor will get higher.

 

Stop Loss

To determine the stop loss, we can use the 144 EMA as the reference resistance line. If you are good at analyzing the price action confirmation signal, you may use the candlestick pattern to identify the SL point.

 

Take Profit

The take profit is usually set to the nearest support. You may use the key swing low to identify the optimum exit point for the trade. But the minimum risk to reward ratio should be 1:2 for each trade.

 

Trend following Trading System For MT4 - Conclusion

By learning to use the trading strategy, you may expect to ride the existing trend with confidence. But to gain real confidence in trading, you should spend more time trading the demo account. The demo account provides an optimum trading environment to learn new things. You might be an experienced trader but knowing the functions of a new system requires time and devotion. So, we suggest the use of this system to learn the core functions of this strategy in the paper trading account.

 

Before you start using this strategy to trade with real money, you should be aware of the risk factor. No trading system can generate 100% profitable trade signals. So, you should always maintain proper money management rules and expect some losing trades in the long run. 

 

Download the complete system description and the files here:

FREE Trend following Trading System

Download the FREE Trend following Trading System for MT4.

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I'm Mike Semlitsch the owner of PerfectTrendSystem.com. My trading career started in 2007. Since 2013 I have helped thousands of traders to take their trading to the next level. Many of them are now constantly profitable traders. 

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