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Sentiment Change Forex Swing Trading Strategy

Amandeep Sonewane | Aug. 1, 2019
Sentiment Change Forex Swing Trading Strategy

You can now download the Sentiment Change Forex Swing Trading Strategy for free on AtoZ Markets indicators gallery.

This strategy will be based on two concepts: price rejection and momentum. These two things are forms of market sentiments that could be observed on price.

To determine our area of price rejection, we will be using the Bollinger Bands’ outer bands. These outer bands, which are determined by a deviation from the mean, are areas of extremes. Price going beyond these areas could be a bit too high. What we need is for the price to show signs of rejection around these areas of extremes. This will be determined by the presence of wicks pushing against the outside of the bands. This is because wicks are telltale signs of price rejection. If we see this, then we wait for our next signal.

Indicator: 20-period Bollinger Band

Timeframe: 4-hour chart

Currency Pairs: any major pairs and crosses

Trading Session: any

Buy (Long) Trade Setup Rules

Entry

  • Price should be coming from around the lower outer band (oversold area)
  • Candles should have wicks below showing signs of rejection of the oversold area
  • A long bullish momentum candle should close above the midline and should close within the upper one-third of its total length
  • Enter a buy market order at the close of this candle

Stop Loss

  • Set the stop loss a few pips below the low of the candle

Exit

  • Close the trade as a candle closes back below the midline

Sell (Short) Trade Setup Rules

Entry

  • Price should be coming from around the upper outer band (overbought area)
  • Candles should have wicks above showing signs of rejection of the overbought area
  • A long bearish momentum candle should close below the midline and should close within the lower one-third of its total length
  • Enter a sell market order at the close of this candle

Stop Loss

  • Set the stop loss a few pips above the low of the candle

Exit

  • Close the trade as a candle closes back above the midline

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “Sentiment Change Forex Swing Trading Strategy” template to apply it on the chart.

Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.