For you to make consistent profit it is advisable you use a combination of indicators. This makes the process of decision making a bit simpler, since you look to see if the combination of the indicators you are using are giving the same kind of a signal; that is, if both are saying buy or sell. Otherwise if only one of the indicators is giving a signal then it is advisable to hold your peace until the other gives the same signal and if it doesn’t then avoid opening a position at all.
One of such a strategy is by using the box trading indicator together with the Ema channel indicator. This trading system is mostly suited when placing pending orders.
A pending order is an order that you place anticipating that when the market level gets to the point where you have placed your trade, it will activate the order. Essentially the type of pending orders that is used with this strategy, are the stop orders. These usually are activated as the trend continues in its previous direction.
The box breakout trading indicator is comprised of two indicators: the forex Blue Indicator and the Simple Moving Average. The Forex Blue Indicator is responsible for drawing a blue box within the region in between the low and high values that are sampled out in a span of 3 hours. The trader uses this box to place pending orders.
NOTE: The orders should be placed only after the complete formation of the blue box.
However for you to decide whether you are to place a buy or a sell order, the SMA indicator of the Box breakout trading indicator and the Ema channel indicator comes in handy.
Fig. Ema Channel indicator.
The Ema channel on the other hand, is a channel that has three lines; the upper line, the middle line and the lower line. Mainly the middle line of the channel band is the one that give the signal of whether to buy or sell depending on its colour.
How to conclude whether to place a buy or sell order
Buy Oder: the buy position should be opened when the Blue box is formed above the Simple Moving Average. However to make sure that it is time to place a buy pending order, then you have to check that the middle band of Ema channel indicator is green.
Fig. the posittion of buy stop and sellstop entries
Sell order: the sell position should be opened when the Blue box is formed below the Simple Moving Average. However to make sure that it is time to open the sell positon, then you have to check that the middle band of Ema channel indicator is red.
Once you place your orders you should place stops at twenty pips away from the point of the order. That is the stop loss should be 200 points away from the order and in the same way the take profit 200 points away.
If the orders haven’t been closed by the stop loss and the take profit before the close of the day then the trader should close this trades manually himself.
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