The appropriateness of using this strategy could be questioned if the indicators already familiar in it were not used in it. The weak side of the strategy is the rare entry signals and the presence of a relatively large number of losing trades. But, as practice shows, lucrative deals confidently cover the loss. And this happens due to TrendWave trend cyclical indicator and Sentiment market sentiment indicator. How much is an effective Forex strategy, we offer to discuss with you.
Effective Forex Strategy
Both named indicators themselves are auxiliary and rather inaccurate. For example, in the previous strategy of TrendWave, we used another similar cyclical tool, based on Sentiment, we proposed a separate strategy, but at the end of the review you can read about the fly in the ointment. So why try not to use the strengths of both tools that can override each other’s weaknesses? How to do this, we will show with an example.
- The timeframe is H1. You can also put H4, but you should not reduce the timeframe.
- Asset – EUR / USD.
- TrendWave settings: WavePeriod -10, AvgPeriod – 21, Levels: 60, 50, -60, -50.
- Sentiment settings: Period – 10, Mode – Fast, Levels: 0.22, -0.22.
Recall that you can save time if you specify an email address in the comments to the article. Both of these indicators will be sent to you free of charge as soon as possible. If necessary, we will share instructions for installing templates in MT4.
Conditions for opening a long position:
- TrendWave displays a blue dot on the chart below the -50 mark. It would be better if the point is located below the level of -60, but then the signals will be even less.
- Sentiment is below the -0.22 mark.
At the next candle you can open a deal. Stop length at the discretion of the trader (up to 50 points). Take profit is better to put up to 50 points, but so that it is more than the length of the stop.
Conditions for opening a short position:
- TrendWave displays a yellow dot above the 50 mark on the chart. It’s better if the dot is above the 60 level, but then the signals will be even less.
- Sentiment is above the 0.22 mark.
You can run a strategy simultaneously on multiple currency pairs by adjusting the levels of Sentiment and order values. Parameters TrendWave better not to change. Otherwise, various kinds of experiments are left to the discretion of the trader. An effective Forex strategy for these indicators is subject to the absence of a sharp surge in the news market, although short fundamental surges are partially leveled by the timeframe. We invite everyone to discuss the strategy in the comments!