The
Forex Cash King is price action strategy using pivot points to
generate trading signals.
The
indicators are: Forex Cash King SR, Forex Cash King indicator.
Pivot
points are a method of predicting support and resistance levels for
the future. Using mathematical formulas the trader is able to know
today, what will be the most powerful support and resistance levels
tomorrow.
Don't
worry, you don't need to calculate anything manually- there are
indicators in any trading platform that do that automatically. We are
supplying you with the indicator for MetaTrader 4 platform.
If
you are interested, here are the formula for Pivot calculation:
H
– Yesterday's Highest Price
L
– Yesterday's Lowest price
C
– Yesterday's Close Price
P
= (H + L + C) / 3.
R1
= 2×P − L
S1
= 2×P − H
R2
= P + (H − L)
S2
= P − (H − L)
R3
= P + 2×(H − L)
S3
= P − 2×(H − L)
Each
of these points is a PIVOT POINT. The R points are Resistance levels
that we will trade only with LONG trades, and the S points are
Support level that we will trade only with SHORT trades.
Actual
Trading
Each
day there are 5 pivot levels that we can trade. However we don't
trade any pivot levels (it has to meet our filters).
First
step is to confirm that the pivot level is strong.
We
confirm that by demanding that price was in 30 pips distance from the
pivot level at some point of the day.
This
makes sure that the pivot level is strong enough to trade:
After
we confirm that the pivot level is good, we proceed by putting a
trade order:
if
the level is a RESISTANCE level we will enter a long trade when the
pivot is broken, if the level is a SUPPORT level we will enter a
short trade when the level is broken.
For
long trades will put a buy order 1 pip above the level, and for
short trades we will put a sell order 1 pip below the order.
So
if we have a Resistance pivot at 1.3119 the buy order will be placed
at 1.3120
If
we have a Support pivot at 1.3019 the sell order will be placed at
1.3018, and so on.
Stop
Loss
We
use a 20 pips trailing stop. This means that if price goes into +5
pips profit our stop loss will move 5 pips upwards, so the maximum
price can go back before we exit the trade is 20 pips.
How
to set trailing stop loss:
After
entering the trade, right-click on it :
Take
Profit
We
exit half of the trade at +26 pips profit, and half the profit at +52
pips profit.This is designed to get us in profit AND to take
advantage of big moves.
How
to close half position:
Click
on 'Close Order', then set the lot number to be half of the lots
number. This will make only half of the position to close.
Receiving
Alerts
To
receive automatic sound (message box) alert when the Forex Cash King
generates a signal, click on Inputs tab and set 'SoundAlerts' to
True.
The
Forex Cash King can also send emails when it generates trades and\or
exit signals. As a default it is turned off. To receive email when
the Forex Cash King issues signals, do the following actions:
1.
Enable Email Alerts. In the 'Inputs' tab, set 'Email.Alerts' to True.
2.
Click on 'Tools' and 'Options'.
3.
Click on the 'Email' tab.
4.
Check the 'Enable' checkbox.
5.
Ask your Internet Service Provider (ISP) what are his email server
details.
6.
Click on 'Test'. You should receive a test email to your inbox.
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