Ribbon Trading System Review

The Ribbon Trading System is a technical analysis tool that helps traders identify trends in the market. The system uses multiple moving averages of varying time periods to create a ‘ribbon’ of lines on a price chart.

This ribbon provides traders with an indication of the trend direction and strength, making it easier for them to make informed trading decisions. The Ribbon Trading System is often used by swing traders and position traders who are looking to hold positions for several days or weeks.

Ribbon Trading System

Download Free Ribbon Trading System

It can be applied to any trading instrument, including stocks, forex, commodities, and futures. In this article, we will explore the Ribbon Trading System in detail, including its applications and tips for using it effectively in your trading strategy.

Understanding the Ribbon Trading System

The section elucidates the underlying principles and concepts of a technical analysis approach known as the ribbon trading strategy. This method utilizes multiple sets of moving averages displayed in an intertwined pattern to identify long-term trends, short-term reversals, and potential entry and exit points for trades.

The term ‘ribbon’ refers to the visual representation of these moving averages on a chart that creates a ribbon-like appearance. Technical analysts who use this approach believe that longer-term moving averages are more reliable indicators of market trends than shorter-term averages.

By using several different time frames for the moving averages, traders can gain a comprehensive view of price movements at various intervals. When the ribbons converge or diverge from each other, it provides clues about changes in momentum or trend direction. Traders can then use these signals to make informed decisions about when to enter or exit positions.

In summary, the ribbon trading system is a technical analysis approach that uses multiple sets of moving averages to determine long-term trends, short-term reversals, and potential trade entry and exit points based on visual cues created by the ribbons’ position relative to one another on a chart.

Applications of the Ribbon Trading System

The Ribbon Trading System is a versatile trading tool that can be applied to different timeframes and markets. Its adaptability makes it useful for traders who engage in swing trading, where they hold positions for several days or weeks.

Additionally, the system emphasizes following the trend which can help minimize risk and maximize profits.

Versatility in Timeframes and Markets

This section underscores the importance of versatility in terms of timeframes and markets when it comes to effective trading strategies, particularly in the context of the ribbon trading system. The ribbon trading system is a popular trend-following strategy that uses multiple moving averages to identify trends and generate buy or sell signals. One of its key advantages is its ability to adapt to different market conditions, making it suitable for a wide range of timeframes and asset classes.

Here are some ways in which the ribbon trading system can be applied across different timeframes and markets:

  • Intraday trading strategies: The ribbon system can be used effectively on shorter timeframes such as 5-minute charts or 15-minute charts. This allows traders to take advantage of intraday fluctuations while still maintaining a long-term perspective.
  • Swing Trading: The ribbon system works well for swing traders who hold positions for days or weeks. By using longer-term moving averages, it helps filter out noise and provides clear signals for entering and exiting positions.
  • Long term investment opportunities: For investors looking to hold positions over many months or years, the ribbon system can still be useful. By using longer-term moving averages, it helps investors stay on the right side of major trends while avoiding false breakouts and whipsaws.
  • Forex Trading: The ribbon system is also popular among forex traders who use technical analysis. It works well for currency pairs with strong trending characteristics such as USD/JPY or EUR/USD.
  • Commodity Markets: Finally, commodity traders also find value in utilizing the ribbon trading system since commodities tend to exhibit strong trends over extended periods that can benefit from this type of strategy.

In conclusion, versatility is critical when selecting an effective trading strategy like the ribbon trading system. This approach’s flexibility makes it attractive across various markets irrespective of whether you’re a day trader, swing trader, long term investor or involved in forex or commodity markets.

Benefits for Swing Traders

Swing traders can benefit from utilizing the versatile strategy discussed in this section, as it allows them to filter out market noise and identify clear entry and exit signals for positions held over days or weeks.

The Ribbon Trading System’s ability to adapt to different markets and timeframes provides an advantage over other swing trading strategies. Backtesting results have shown that the system can be effective in various markets such as stocks, forex, and commodities.

The Ribbon Trading System’s unique approach of using multiple moving averages with different time periods helps traders identify trends more accurately. This feature is especially useful for swing traders who seek to capture larger market moves while avoiding false signals that may lead to losses.

Additionally, the Ribbon Trading System provides a systematic way of managing risk by setting stop-loss levels based on volatility bands rather than arbitrary price levels.

Overall, the benefits of using the Ribbon Trading System make it a valuable tool in a swing trader’s arsenal when seeking profitable opportunities within volatile markets.

Trading with the Trend

One effective strategy for swing traders is to trade with the trend, utilizing market momentum and identifying key support and resistance levels to make informed trading decisions.

Identifying trends is a crucial aspect of this strategy, as it allows traders to enter positions in the direction of the dominant market movement. Technical analysis tools such as moving averages, trendlines, and chart patterns can aid in identifying trends.

Once a trend has been identified, swing traders can then look for opportunities to enter trades at key support or resistance levels within the trend. These levels provide potential entry points with favorable risk-reward ratios, as stops can be placed just below or above these levels respectively.

Additionally, traders may utilize technical indicators such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD) to confirm their trading decisions within the context of the overall trend.

Overall, trading with the trend using technical analysis can increase a swing trader’s chances of success by aligning their trades with prevailing market forces and providing clear entry and exit signals based on objective data.

Tips for Using the Ribbon Trading System

When setting up the chart for the ribbon trading system, it is important to select an appropriate time frame and apply the necessary moving averages.

Using other indicators such as oscillators or trend lines can provide additional confirmation signals for trade entries and exits.

Properly managing risk through position sizing and stop loss orders, along with maintaining discipline in following the trading plan, are crucial elements for success with this system.

Setting Up the Chart

The initial step in implementing the chart for this particular approach involves selecting a suitable time frame and choosing a currency pair to trade.

It is recommended that traders select a time frame that aligns with their trading goals, whether it be short-term or long-term trades.

Additionally, traders should choose a currency pair that they are familiar with and have researched extensively.

After selecting the appropriate time frame and currency pair, traders can begin customizing their chart using specific technical indicators such as moving averages and trend lines.

These customization options will vary depending on the charting software being used. Some popular charting software recommendations for implementing the ribbon trading system include MetaTrader 4 (MT4) and TradingView.

Once the chart is set up according to personal preferences, traders can begin analyzing price movements using the ribbon indicator to identify trends and potential entry/exit points for trades.

Using Other Indicators

Incorporating additional technical indicators alongside the chart can provide traders with a more comprehensive analysis of market trends and potential trading opportunities, enhancing their ability to make informed and profitable decisions. Combining indicators can help confirm or negate signals from the ribbon trading system, strengthening the validity of entry points.

Here are four commonly used technical indicators that traders often use in conjunction with the ribbon trading system:

  1. Relative Strength Index (RSI): A momentum oscillator that measures overbought and oversold conditions.
  2. Moving Average Convergence Divergence (MACD): A trend-following momentum indicator that shows the relationship between two moving averages.
  3. Bollinger Bands: A volatility indicator consisting of three lines; a simple moving average, an upper band, and a lower band.
  4. Fibonacci Retracement: A tool used to identify potential levels where a price correction may occur during an uptrend or downtrend.

By using these additional technical indicators, traders can identify entry signals that may not be as apparent on just the ribbon trading system alone. The combination of these tools provides a more complete picture of market activity and helps traders make better-informed decisions when entering or exiting positions.

Managing Risk and Staying Disciplined

Risk management techniques and the importance of discipline in trading are crucial components of any successful trading strategy.

In order to effectively manage risk, traders must have a solid understanding of their own risk tolerance as well as the potential risks associated with each trade. This includes using stop-loss orders, diversifying their portfolio, and avoiding over-leveraging positions.

Staying disciplined is also an essential aspect of successful trading. This means having a clear set of rules for entering and exiting trades, sticking to those rules even when emotions are running high, and avoiding impulsive decisions that could lead to unnecessary losses.

It also involves maintaining a consistent approach to trading over time, rather than constantly changing strategies based on short-term market fluctuations.

By following these principles of risk management and discipline, traders can improve their chances of success in the highly competitive world of ribbon trading.


The ribbon trading system is a technical analysis tool used to identify trends in trading markets. This system involves the use of multiple moving averages that are plotted on a chart and displayed as ribbons. The ribbons move in a smooth, flowing manner, providing traders with an easy-to-interpret visual representation of market trends.

The ribbon trading system has several applications, including identifying trend reversals, detecting support and resistance levels, and generating buy/sell signals. It is particularly useful for longer-term traders who want to capture larger market trends over extended periods.

To use the ribbon trading system effectively, it is essential to understand its nuances fully. Traders should pay close attention to the spacing between the ribbons, as well as their direction and slope. Additionally, they should consider incorporating other technical indicators into their analysis to confirm or refute potential trade signals generated by the ribbon system.

In conclusion, the ribbon trading system is a powerful tool for identifying market trends and generating profitable trades. However, it requires an understanding of its intricacies and should be used in conjunction with other technical indicators for maximum effectiveness. By following best practices when using this system and continually refining one’s analysis skills, traders can improve their chances of success in today’s complex financial markets.

Author: Dominic Walsh

I am a highly regarded trader, author & coach with over 16 years of experience trading financial markets. Today I am recognized by many as a forex strategy developer. After starting blogging in 2014, I became one of the world's most widely followed forex trading coaches, with a monthly readership of more than 40,000 traders! Make sure to follow me on social media: Instagram | Facebook | Linkedin | Youtube| Twitter | Pinterest | Medium | Quora | Reddit | Telegram Channel

Leave a Comment

Hey.lt - Nemokamas lankytojų skaitliukas