Detrend Forex Trading System ~ trading hours in forex
Detrend Forex Trading System is a momentum strategy.
Time Frame 60 min or higher.
Currency pairs: majors (only 60 min time frame) or higher time frame.
Indicators:
Simple moving average 3 period close;
Simple moving average 15 period close;
Detrend Indicator (DPO) 14 period close;
ADX (14 period close, with 25 level);
MACD (default setting: 12, 26, 9).
See setting in the picture below:
In the above chart, the black MA is the 3 day, and the light blue MA is the 15 day. When
using the 3/15 cross, a buy confirmation is when the 3 day crosses above the 15 day, and a
sell confirmation is when the 3 day crosses below the 15 day. (Please see above chart) For
us to take a signal from the DPO, when the confirmation from the MACD and DMI
(optional) is there, the 3/15 must confirm the trade by crossing up to 3 candles before or
after the DPO crosses the zero line. Let’s say the DPO crosses above the zero line and that cross is confirmed by the MACD and the DMI, and then on the same candle the 3/15 crosses also, or on the 2 nd or 3 rd candle after the DPO crosses the 3/15 crosses, this is a valid signal. If on the other hand the 3/15 cross first, (which occurs much more frequently) and we get a signal on the DPO on that candle or the second or third candle after the cross of the 3/15, then that is a valid confirmation. In the above chart, both of these examples of the 3/15 cross is a perfect example of a valid sell signal, and then a valid buy signal,
confirmed by all indicators at the same time.
Rules Detreend forex trading System
Long Entry
1 The Detrend indicator cross above the zero line.
2The MACD line must be above the signal line.
3 The +DI should be above the –DI or just be crossing above the -DI. (As you learned, this is not 100% necessary, but preferable.)
4 the 3 MA must cross above the 15 MA up to 3 candles either
before or after the upward cross of the Detrend Indicator.
Short Entry
1 The Detrend indicator cross below the zero line.
2 The MACD line must be below the signal line.
3 The +DI should be below the –DI or just be crossing below the -DI. (As you learned, this is not 100% necessary, but preferable.)
4 Finally, the 3 MA must cross below the 15 MA up to 3 candles either
before or after the upward cross of the Detrend indicator .
Exit Position (EUR/USD 60 min)
Place your stop loss 10 pips below the 15 MA on a long trade or 15 pips above the 15 MA on a short trade, OR put the stop at 30 pips, whichever is closer. (35 – 40 on the EUR/USD)
Continually trail the stop 10 pips below the 15 MA on a long trade or 15 pips above the 15 MA on a short trade, as the currency moves in your favor.
Once you are up 50 pips, move your stop loss to your entry point. Leave the stop loss at your entry
point for the duration of the trade.
Exit the trade when the 3 MA crosses below the 15 MA if you are long, or when the 3 MA crosses above the 15 MA if you’re short.
This is an example of a buy signal on the USD/CHF that was not confirmed by the DMI. If
you look closely, at the time of this trade the +DI had not yet crossed above the –DI. It was
still below it, however the +DI and –DI were converging very close together, and the DPO
had crossed 2 candles after the 3/15 cross, and the MACD confirmed the trade, so it was
okay to take this signal. Had the two lines of the DMI still been very far apart and widely separated you would want to pass on the trade. This ended up being a very profitable trade. It is important that when exiting the trade, you wait for the 3 to fully cross the 15 MA, because as you can see by the area that is circled on the chart, they nearly crossed but didn’t quite cross in the middle of the trade, and the currency ended up moving quite a bit further before the 3/15 finally crossed, confirming the exit of the trade.
Bought – 1.2447
Stop Loss – 1.2410 (37 pips, 10 pips below the 15 MA)
Sold – 1.2656
Profit – 209 Pips
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| Detrend (DPO) Forex Trading System |
Here is an example of two short trades on the USD/CHF, one right after the other. They
were both good trades, confirmed by all indicators simultaneously.
First Trade:
Sold – 1.4133
Stop Loss – 1.4177, 40 pips (Also 15 pips above the 15 MA)
Bought – 1.4067
Profit – 66 pips
Second Trade:
Sold – 1.4028
Stop Loss – 1.4063, 35 pips (15 pips above the 15 MA)
Bought – 1.3876
Profit – 152 pips
More info for
Detrend Forex Trading System ~ trading hours in forex:
