A trending market is a great way to trade forex. Trading with the trend means that you have fewer headwinds. The majority of the market trades in your direction, and very few traders are trading against it until there is a strong reversal signal on strong support or resistance.
Trends can be identified in many different ways. The swing highs and lows of price action are used by experienced price action traders to determine the trend. However, this method makes it difficult to identify trends. There are many trading indicators that other traders use. Some of them are excellent while others just don't work. One of the best ways we can identify trends is right in front of us. This is our trusted moving average indicator.
Moving averages are a powerful tool for identifying trends. You can identify if the current price of the item is higher than or lower than the average to determine if it has a bias towards upwards or downwards. If the price is always higher, it must be increasing, and vice versa.
Individually moving averages might work. What if we used a lot of them? This would increase our chances of finding the right trend direction. We can easily identify which trend direction we are using by simply looking at the chart.
Timeframe: any timeframe
Currency Pair: any, preferably major pairs when scalping or day trading
Session: swing trade could be any session, while day trading and scalping should be the session of the currency being traded (Ex: GBPUSD – London or New York session)
How to trade with Wave Rider Forex Trading Strategy?
The Carter MA indicator is a combination of many Exponential Moving Averages, (EMA), which traders commonly use. It includes the 8, 21, 50 and 100 EMA. The 8-period EMA moves too fast, causing a whipsaw effect on the EMAs. Trends could be identified regarding the stacking of the 21, 50, 100 and 200 EMAs correctly.
Here is an example chart showing a stacked EMA. The 21 are at the top, and 200 are at the bottom. This illustrates how easy it can be to spot trends using moving averages.
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Buy Trade Setup
Entry
- The following order should be used for EMAs:
- 21 EMA (green), top
- 50 EMA (blue), 2nd from the top
- 100 EMA (dashed-red): 2nd from the bottom
- 200 EMA (solid Red): Bottom
- Place a buy order at the close of each candle, when the aqua upwards arrow of binary arrows indicator appears.
Stop Loss
- Place the stop loss just below the arrow
Exit
- When the red downward arrow from the binary arrow indicator appears, close the trade.
Setup for Trades
Entry
- The following order should be used for EMAs:
- 21 EMA (green), bottom
- 50 EMA (blue), 2nd from the bottom
- 100 EMA (dashed-red): 2nd from the top
- 200 EMA (solid Red): Top
- Place a buy order at the close of each candle, when the red downwards arrow of binary arrows indicator appears.
Stop Loss
- Place the stop loss higher than the arrow
Exit
- When the indicator's aqua upward arrow for binary arrows appears, close the trade.
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the bottom of the post.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader 4 software file directory.
- Restart your MetaTrader platform.
- Navigate to “Indicators.”
- And select “Wave Rider Forex 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.
Should you trade with Wave Rider Forex Trading Strategy on your own at all?
Before you start trading with Wave Rider Forex Trading Strategy, you'll want to read this.
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