Sifufx Forex System For MT4
Using price auto-channel and a Hull Moving Average indicator as the building blocks; The Sifufx Forex System For MT4 is a trend following forex trading system. Unlike other trends following systems; however,the Sifufx Forex Trading System seeks to identify trends at their beginning to enable traders to ride a longer market price rally for more profits. It is not easy to identify the beginning of a trend accurately, and this is the reason why the majority of trend following forex trading systems seek to take advantage of trading opportunities within well-established trends. With the major currency pairs, their major characteristic is high volume trading with manageable volatility. These two reasons make the major currency pairs and the Sifufx trading system a pair made in heaven; a system that seeks to identify trends at their beginning for currency pairs that are in a trend most of the time with minimal volatility hence retracements.
Its applicability to the major currency pairs and its trend basis makes this trading system also applicable to all trading timeframes, from M5 to weekly.
What are these major currency pairs? The four major currency pairs that can be used to trade this forex trading system are; EUR/USD, GBPUSD, USDCHF, and USDJPY.
OVERVIEW OF THE Sifufx Forex System For MT4
The Sifufx trading system uses quite an array of trading indicators but as earlier mentioned identifying a trend at its beginning is quite an uphill task. How, then do these indicators combine to achieve this difficult feat and provide a winning trading strategy?
The Auto-Channel indicator automatically calculates and draws the appropriate price channel to the trading charts. In an uptrend, it draws an ascending price channel made up of higher highers and higher lows. The reverse is true; in a downtrend, this indicator automatically plots a descending price channel made up of lower highs and lower lows.
Although this trading system comes complete with a template, experience in trading shows that universal auto=channel settings don’t work; for the lower timeframes, M5 to H1, use the 24 hours input while for higher timeframes the 60 hours input is ideal.
Mention moving averages and the obvious answer is in threes, simple, smoothed, and exponential. By now it is pretty clear that the Sifufx Forex trading System is not common. Instead of one of the universally used moving averages being the cornerstone of this forex system, a Hull Moving Average, HMA, is its go-to moving average. The reason for using one as the main indicator is to eliminate the Achilles heel synonymous with moving averages, the lagging effect.
The HMA dispels the lagging effect of moving averages through an algorithm, LWMA[square root(period), (2*LWMA(period/2, price)-LWMA(period, price)], that at the same time does not compromise the smoothness of the moving average due to market noise.
The HMA, of period 60, is also colour coded for easy identification of the prevailing market trend direction;
- Dark Blue colour to show a bullish market,
- Yellow colour to indicate a ranging market,
- Red colour to signal bearish market conditions.
In addition to the powerful Hull Moving Average, the Sifufx trading system also employs the services of two exponential moving averages, EMAs. EMAs reduce lag by assigning different weights to prices exponentially; the most recent prices have more significance than historical prices. The two EMAs in use are of periods 50 and 200; exponential moving averages used extensively to identify the prevailing market trend.
Instead of the normal zigzag indicator plotted on a chart to appear as a zigzag line, this trading system reduces clutter on charts by instead plotting red and blue coloured arrows to signal bearish and bullish trend reversal points, respectively.
3 MA Crossover Signal
This indicator appears as lime coloured arrows facing up and down to indicate when to take a bullish or bearish position, respectively. They are the visual indication of where the EMAs 5, 20, and 34 crossovers occur, acting as the entry signals subject to confirmation by the other indicators.
Utilizing standard Bollinger bands of deviation of 2and a period of 20, applied to the high and low of prices, this trading system gives trader’s insight into overbought and oversold price zones and potential trend reversal points.
Fx-Fish Trading Indicator
This momentum indicator helps traders fish out the beginning of a trend or their continuation. More in appearance like the MACD, the Fx-Fish is more precise in its signals. Using blue and red histograms to identify bullish and bearish trends, respectively, the bars oscillate around the 0 level, positive for long positions and negative for short positions.
In this trading system, a Moving Average Convergence Divergence, MACD, of periods 5, 13, and 1 is in use. The Sifufx forex trading system employs this filter indicator to:
- Identify the trend; positive blue bars for a bullish trend and negative red bars for a bearish trend.
- Identify overbought and oversold areas, levels 313 and -177, respectively; potential trend reversal points.
THE SIFUFX FOREX SYSTEM TRADING SETUPS
First, the price Auto-Channel indicator an ascending channel and the prices test the lower channel.
Second, the Zigzag indicator generates a blue arrow signaling a bullish reversal.
Third, the hull moving average changes colour from red to dark-blue signaling start of a bullish trend.
Fourth, the 3 MA Crossover indicator generates buy signals; lime coloured arrows.
Fifth, the market prices close above the 50 and 200 EMAs.
Sixth, both the FX-fish and the MACD indicator are positive and alight with blue histograms.
The stochastic oscillator is also full of dark-blue histograms signaling a strong uptrend.
When you observe all the above trading parameters, marked by aqua ticks, trigger a long position at next candle’s opening above the EMAs.
First, the price Auto-Channel indicator a descending channel and the prices test the upper channel.
Second, the Zigzag indicator generates a red arrow signaling a bullish reversal.
Third, the hull moving average changes colour from dark-blue to red signaling start of a bearish trend.
Fourth, the 3 MA Crossover indicator generates buy signals, lime coloured arrow.
Fifth, the market prices close below the 50 and 200 EMAs.
Sixth, both the FX-fish and the MACD indicator are negative and ablaze with red histograms.
The stochastic oscillator is also full of maroon histograms signaling a strong downtrend.
When you observe all the above trading parameters, marked by aqua ticks, go short at next candle’s opening below the EMAs.
Stop Loss and Take Profit
Use 10-20 pips below or above the price auto-channel for a bullish and bearish position, respectively.
For exit, use either the opposite auto-channel as your predetermined take profit level or wait for the zigzag signal or the HMA to change colour.
Download the complete system description and the files here: