Most of the strategies we offer are based on modified indicators that are considered classic and included in the basic versions of MT4. We have repeatedly warned that strategies are the basis for further improvement. They are needed in order to understand the principle of operation of this or that indicator in different market conditions. No one bothers to supplement these strategies with anything you like. And share your experience in the comments!
The strategy proposed below is based on the familiar many relative strength index with a filter for Forex. The RSI + TC indicator differs from the basic RSI by a built-in (added to the code) filter based on the Bollinger Bands. If the RSI is considered a drawback to the presence of frequent false signals due to redrawing, then in this tool errors due to the filter are partially leveled.
- We remind you that you can test the indicator by receiving a free template for installation in MT4. Enter your email address in the comments and we will send it to you as soon as possible.
Relative Strength Index with Forex Filter
Almost any currency pair will work with this oscillator. Timeframe used is H1. At such a time interval there is a time to evaluate the signal and make a decision. On different currency pairs, you can adjust the length of the stop (depending on volatility) and change the settings.
RSI + TC settings: RSIPeriod – 21, BullLevel – 50, BearLevel – 50, Levels: 30, 50, 70.
Conditions for opening a long position:
- RSI + TC drops below level 30.
- The indicator draws red dots on the chart.
- After the previous conditions have been met, two growing candles appear on the chart or RSI + TC rises above level 30.
On the third rising candle or after raising the RSI + TC above level 30, open a stop loss trade to 50 pips. The target profit level is 20 points, after which 50% of the transaction can be minimized, 50% can be started by trailing.
Conditions for opening a short position:
- RSI + TC rises above level 70.
- The indicator draws green dots on the chart.
- After the previous conditions have been met, two falling candles appear on the chart or the RSI + TC drops below the 70th level.
The principle of opening and closing a transaction is similar. Friday night and Monday morning are missing – these are the most unpredictable days. We do not recommend reducing the timeframe, as the number of losing trades increases. We hope that this strategy with the filter for Forex will interest you and share your impressions in the comments!