Introducing the Pattern Candlestick strategy filtered with the Parabolic Envelope, a powerful method in the world of Forex trading. This approach relies on identifying key candlestick patterns like Shooting Star, Engulfing, Doji, and Dark Cloud Cover, all while leveraging the Parabolic Envelope for trend confirmation. Assuming familiarity with these patterns, let's delve into the setup and trading rules.
Strategy Setup
Time
Frame: Preferably H1 or higher for better clarity.
Currency
Pairs: All pairs are suitable.
Indicators: Utilize MetaTrader 5
(MT5) with the following Indicators MT5
Parabolic
Envelope.
Pattern Recognition.
Symbol Changer.
Optional:
Paint Bar Momentum.
Optional: Stochastic Oscillator
(5,3,3).
Trading Rules
This strategy offers two
modes of execution: scalp trading and trend following, each with
distinct entry setups.
Buy
Confirm an uptrend
with the Parabolic Envelope positioned below the candles.
Spot a
valid buy candlestick pattern.
Enter the trade at the opening of
the next bar.
Sell
Confirm a
downtrend with the Parabolic Envelope positioned above the
candlestick.
Identify a suitable sell candlestick pattern.
Enter
the trade at the opening of the subsequent bar.
Exit Strategy
For
scalp trading on candle
Implement a stop loss at the
relative low of the preceding 15 candles.
Aim for a profit
target ratio of 0.8:1 compared to the stop loss.
For trend
trading
Set the stop loss at the previous swing, even if
it's within the same trend.
Target a profit ratio ranging from
1:1 to 1:1.5 compared to the stop loss.
Considerations
To
manage risk and minimize variance:
Limit yourself to following a
maximum of two signals, each with its own dedicated money management
approach.
Embrace these guidelines to enhance your trading
experience and navigate the Forex markets with confidence.
Download
https://drive.google.com/file/d/1yZdC5HAKMhRt6q44FO1ZRxYWxNMSE1qz/view?usp=sharing
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