Forex octopus is a simple trend following strategy. It uses five custom build technical indicators. They all are simple technical tools which we have been seeing in the past. This system generates the trading signal on the basis of three exponential moving averages and the two other indicators named octopus 1 and octopus 2. The greatest advantage of this trading system is you can catch the trend it its early phase and ride fullest to the end. Simply being able to do so is enough to make a happier trading life. Another greatest advantage of this system is you can use this system on any currency pair. Be careful that this system is best when you apply it on an hourly chart. Avoid trading during high impact news like NFP payrolls, central banks rate decisions, etc. Such events are unpredictable, anything can happen. In such times of high uncertainty any technical system might fail. So the best thing we can do is – do nothing during the important fundamental releases.
So when Forex Octopus system is applied on the chart, our chart looks like this.
- Exponential Moving Averages.
- 3 EMA: This is the fastest moving average in this system. Since very small period is used in it, it almost sticks with the price. It is yellow in color.
- 13 EMA: This is the mid-speed moving average in this system. It is faster than 55 EMA and slower than 3 EMA. It is green in color.
- 55 EMA: It is the slowest moving average used in this system. Slow-moving moving averages are often smooth and they are used to know the long term direction of the price.
- Octopus 1: It is a custom build technical indicator used in this system. The main use of this indicator is to filter the trend.
- Octopus 2: It is also same like octopus 1 but the different inputs are used in it.
Buy Conditions Using Forex Octopus Trading System.
- The 13 EMA (green color moving average in the above chart) should cross above the 55 EMA (red color moving average).
- Both Octopus 1 and Octopus 2 should be green in color.
- Place stop loss just below the recent swing low.
- Take your profits as soon as the octopus 1 or octopus 2 changes its color to red.
Selling Conditions Using Forex Octopus System.
- The EMA 13 (Green color moving average on the above chart) should cross below the 55 EMA (Red color moving average).
- Both octopus 1 and Octopus 2 should be red in color.
- Place your stop loss just above the recent swing high.
- Take your profits as soon as the Octopus 1 or Octopus 2 changes its color to green.
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