Forex strategy Extreme TMA System turns out to be a very effective trading tactic even in the hands of a novice trader, as it is assembled from well-chosen indicators and clear trading rules that allow you to receive high-quality, accurate signals.
What is the essence of this strategy?
The essence of this indicator forex strategy lies in a certain price behavior during a trend movement.
The price, as a rule, does not move strictly straight, and even during the trend it makes small rollbacks - it returns to certain levels, this small pattern is used in this strategy.
Speaking of levels, you can see more here this adviser, which displays on the chart the strong levels at which market makers sit. Don't know who market makers are? Then read more here this article!
Indicator Strategy Signals
We are looking for an entrance according to the following rules:
1. First of all, at the beginning of the analysis, we look at the indicator readings in the lower right corner. As a rule, there are only 3 variants of data that need to be used as a signal:
- If the value is less than -0.25, then we consider only the sale:
- If the value is greater than 0.25 then only buy:
- If the indicator value is between -0.25 and 0.25, then you can consider both buying (Buy) and selling (Sell):
2. When you have already decided on the parameters and direction of the entry, then you need to look further and wait for the price (in this case, Fig. 1) to break through at least one of the channels of the Extreme TMA Line indicator.
The strongest signal is obtained when the price breaks through all the channels, and even coincides on three timeframes: M14, H1, H4 and goes far beyond the channel boundaries.
3. After that, we are waiting for the color of the candle to change: red - sale, blue - purchase, respectively.
4. The Tma Slope indicator has columns on the histogram, if they decrease, then we sell, if they increase, then we buy.
5. If you work on TM below H4, then you need to filter the signals and see what TM Slope shows on H4. If it is less than -0.25 then sell, if it is more than 0.25 then buy, if the readings are between -0.25 and 0.25 then we consider any direction of the transaction.
The exit from the transaction can be one of the proposed options:
1. The histogram of the TMA Slope indicator entered the zone between the levels of -0.25 and 0.25;
2. We exit if the price reaches the opposite border of the Extreme TMA Line channel.
Setting Stop Loss:
Stop loss is set above the high by a couple of points + spread (when selling) and below the low by a couple of points + spread (when buying).
Take profit is usually placed in the middle of the channel (half the width).
Also, when trading, you can use different risk management:
- Conservative: upon reaching 20 points of profit, we close half of the order, and move the stop loss to the breakeven zone. When the price reaches the opposite border of the Extreme TMA Line channel, we close the position or when the Tma Slope histogram bar closes on the opposite side.
- Average: the same as in the conservative one, but only after the stop loss is moved to breakeven, we turn on the trailing stop at the value of half the channel width.
- Aggressive: we move the stop loss to breakeven already when reaching 30 points of profit and set a trailing stop at 1/3 of the channel width.
Recommended couples: all volatile pairs;
Timeframe: M15 to H4;
Time to trade: any;
Template + indicators
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