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Wave Rider Forex Trading Strategy

Amandeep Sonewane | May. 29, 2019
Wave Rider Forex Trading Strategy

You can now download the Wave Rider Forex Trading Strategy for free on AtoZ Markets indicators gallery.

One of the best ways to trade the forex market is by riding a trending market. This is because trading with the trend also means you are trading with fewer headwinds. Much of the market is trading going your direction and only a few are trading against it up until a very strong reversal signal occurs on strong support or resistance.

There are many ways to identify trends. Seasoned price action traders determine the trend by price action’s swing highs and lows. But doing it this way makes identifying trends to subjective. Other traders use a plethora of trading indicators. Some are great while some pretty much just fails. However, one of the best ways to identify trend might be right under our noses. It is the use of our good old trusted moving average indicator.

When you come to think of it, moving averages in itself is a great tool to identify trends individually. Being a moving average, you would know if the price’s bias is upward or downward just by identifying if the current price is higher or lower than the average. If the price is constantly higher, then the price must also be constantly going up, and vice versa.

So, individually moving averages could work. But what if we use a whole bunch of them. This would further increase the probability that we get our trend direction right. By using several commonly used moving averages that are commonly used to identify a trend, we could easily decide which way the trend is just by 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 an indicator comprised of several Exponential Moving Averages (EMA), all of which are commonly used by traders. It is comprised of the 8, 21, 50, 100, & 200 EMA. The 8-period EMA is already quite too fast causing a whipsaw on the EMAs. We could identify trends on whether the 21, 50, 100 & 200 EMAs are stacked correctly.

Below is an example of a chart with a stacked EMA with the 21 on top and the 200 at the bottom. This shows how easy it is to identify trends via moving averages.

Buy Trade Setup

Entry

  • EMAs should be stacked in the following order:
    • 21 EMA (green): top
    • 50 EMA (blue): 2nd from top
    • 100 EMA (dashed red): 2nd from bottom
    • 200 EMA (solid red): bottom
  • Enter a buy market order on the close of the candle when the aqua upward arrow of the binaryarrows indicator appears.

Stop Loss

  • Set the stop loss below the arrow

Exit

  • Close the trade at the close of the candle when the red downward arrow of the binaryarrows indicator appears.

Sell Trade Setup

Entry

  • EMAs should be stacked in the following order:
    • 21 EMA (green): bottom
    • 50 EMA (blue): 2nd from bottom
    • 100 EMA (dashed red): 2nd from top
    • 200 EMA (solid red): top
  • Enter a buy market order on the close of the candle when the red downward arrow of the binaryarrows indicator appears.

Stop Loss

  • Set the stop loss above the arrow

Exit

  • Close the trade at the close of the candle when the aqua upward arrow of the binaryarrows indicator appears

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 “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.

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.