To apply a Forex strategy is only 50% of success, you still need to know how and the time to exit the market.
In my previous strategies I have focused on the principles of close position, which were as follows:
- profit in 10-15-20 points satisfied us, because 50% of the positions we close when reaching this level;
- set a fixed stop-loss at the point of opening the position (breakeven level);
- set trailing stop with a length of 10-20 points.
Trailing stop is a special order that allows you to maximize profits due to the fact that it moves after the price. The price goes up, the warrant price creeps automatically, relieving the trader from constant surveillance for the schedule. And if the price reverses, the order will remain in place, and the position is automatically closed at the best price.
Important: the classic stop loss is set on the broker server, the trailing stop only in the terminal. This means that when the connection is closed (shut down the computer, a power outage), the broker will not see the trailing stop. For this, additionally ordinary stop loss is set at the breakeven level.
Trailing stop strategy
The use of this order can be in a separate strategy, which will be at the entrance to the market during its correction. To catch a convenient point of entry into the market MRO2 professional indicator will help us.
MRO2 – indicator which shows the ratio of the difference of the closing price of the current bar and shifted 3 periods ago to the average range of price movement over the last n bars. The indicator is known only to professionals in small circles, because I get to share this strategy of trailing stop that you were always one step ahead of the competitors.
Download archive with template of the strategy with the indicators used
Incoming terms of strategy:
- the interval at which the trade is conducted – 30 minutes;
- currency pair – GBP/USD;
- the parameters of the indicator MRO2 – (Period MRO2 = 7; Levels = 3);
- trading terminal MetaTrader 4, to which you can download any indicator.
Opening a buy trade:
- the indicator rose above the level “3”;
- the price trend was going down at that time;
- the indicator down below the level of “0.1” in the range of 10 candles after it painted top after the 3rd level.
Strategy trailing stop requires compliance with such order. If it occurs, then enter the market on the next candle with setting a fixed stop loss of 10 points.
About exiting the market I already wrote above. In this strategy using indicator MRO2 recommend getting a profit of 10 points, to move at this point stop-loss to breakeven and to insure the position a trailing stop of 10 points. In this indicator to close 50% of position is not necessary!
Opening a sell trade:
- the indicator rose above the level “3”;
- together with the crossing of the 3rd level, the price moved up;
- as soon as the indicator falls below the level of 0.1 in the range of 10 candles after reaching the top above the 3 level, open a position on the next candle. A fixed stop loss – 10 points.
The value of levels can be changed. For example, the reduction parameter is from 0.1 to 0.06 will increase the quality of the signals, but it is logical that the number of inputs in the market will decrease. It is also possible to reduce the number of bars. Therefore I recommend to test the strategy of trailing stop on demo account, and decide for yourself the degree of risk and to select individual parameters MRO2.
