The Spike Detector MT5 Trading System is a trading approach rooted in Price Action analysis, where a specialized Spike Detector indicator identifies price spikes, potentially indicating the conclusion of a trend and a forthcoming reversal, especially when combined with support and resistance levels. To ensure the accuracy of these Spike Detector signals, the system incorporates a support and resistance indicator, as well as two short-term trend indicators. These supplementary elements serve as confirmations of the Spike Detector's signals.
In essence, this trading system operates on a two-confirmation signal basis. The degree of aggressiveness in interpreting these signals can vary based on the number of confirmations. Generally, on higher time frames, fewer confirmations are required, whereas on lower time frames, more confirmations are advisable. In this context, we will outline the setup for the most assertive version of this system, designed for timeframes of 30 minutes or longer.
Trading System Setup:
Time Frame: 1 minute or higher.
Currency Pairs: Any.
Metatrader Indicators: 5
Colour Trend (period 26).
Spike Detector.
Support and Resistance indicator.
Spartan Spears (period 10).
Trading Rules for the Spike Detector MT5 Trading System:
Buy:
Look for a Spike Detector buy arrow located beneath the candle.
Observe a green bar on the Spartan Spears indicator.
As an optional condition, ensure that the price is within a support zone.
Sell:
Seek a Spike Detector sell arrow situated above the candle.
Verify a red bar on the Spartan Spears indicator.
Optionally, check that the price is within a resistance zone.
Exit Position:
Establish the initial stop loss just below the most recent swing High (for long positions) or Low (for short positions).
Exit the position when an opposing Spike Detector Arrow is generated.
Set a profit target with a minimum ratio of 1:1.2.
Here are some trade examples to illustrate the system in action.
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