Forex black magic system is an amazing trend following trading system. Truly, trend is your friend until it bends. Trend following is a trading strategy based on technical analysis of market prices, rather than one the fundamental strengths of the currencies. In the forex market, traders using a trend following strategy believe that prices tend to move upwards or downwards over time. Traders try to take advantage of these market trends by analyzing the current direction and using it to decide whether to go long or short. There is countless number of different techniques, calculations and time frames that is used to identify the general direction of the market to generate a trade signal. These techniques include moving averages, channel and breakouts. A trend following trader does not try to forecast of predict the future price; they simply jump in to the direction of the major trend and ride the trend.
Now, back to our system Forex Black Magic system is one of the best trend following strategies. This trading strategy generally consists of three custom made indicators.
- Black Magic Bars: These are the custom made black magic candlestick bars. Though they look very similar to the normal candlestick they posses some unique features.
- Black Magic signal provider: This is the main indicator that will help you to execute the trades in the market. Usually you will look for long position when a green arrow appears on this indicator and you will be looking for short position when a red arrow appears on the indicator window.The green arrow is pointed downwards. This means that the sellers are slowly losing control over the market and buyers are ready to jump in to the market. The red arrow is pointed upwards. This means that the buyers are slowly losing control over the market and the sellers are ready to capture the market. Therefore, you will be looking for the long position when a green arrow appears on the Black magic signal provider indicator window while you will be looking for short position when a red arrow pointing upward appears on the black magic signal provider indicator.
- Black Magic Cycle Lines: Black magic cycle lines consist of many lines with a grey horizontal line in the middle section. When there are many lines below the grey horizontal line it indicates that the down cycles are about to finish and the up cycles are about to start. Conversely, when there are many lines above the grey horizontal line it indicates that the upward cycles are about to complete and the down cycle is about to start.
Buying conditions Using Forex Black Magic System.
- A green arrow pointing downward should appear on the BKMGC 2 indicator.
- A bullish candle should be formed on the price chart.
- Most of the cycle lines should be below the grey horizontal line.
Selling Conditions Using Forex Black Magic system.
- A red arrow pointing upward should appear on the BKMGC2 indicator.
- A bearish candle should form on the price chart.
- Most of the cycle lines should be above the grey horizontal line.
Forex Black Magic system Stop Loss and Take Profit.
Stop loss should be placed just below/above the swing low/high. You should take profit as soon as you see green/red arrow on the BKMGC2 indicator.
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