Trend Catcher is a forex trading strategy. As the name suggests, it is a trend following strategy. The trend catcher system is an effective and powerful tool. Trend catcher uses very simple and less indicators which help traders to make trading decisions with ease. It uses 10 moving averages but all of them are very close in terms of the periods use. Weighted moving average is used by the Trend Catcher system. The fastest moving average among them is 2 period weighted moving average which is applied to close while, the slowest moving average is 8 period weighted moving average which is also applied to the closing price as well. All the other remaining moving averages move between these two moving averages. These groups of moving averages look like a wave.
To trade successfully, you should be fully disciplined. Only an working system won’t do anything if you can’t follow the rules of the system with discipline. Discipline comes from repeated practice forcing oneself to fit in to the certain rules and regulation. When the Trend catcher system is correctly installed on your trading system your trading platform should look like this:
- Moving Average waves
This collection of moving averages which forms a wave, is used to determined the major trend of the market. We will only buy when this wave is trending higher and vice versa. Mainly the crossovers of the moving averages within this wave can be used as a trading signal. When the fastest moving average crosses above the slowest moving averages it might be a buying signal and vice versa.
- Moving Average Channel
Moving Average Channel consists of three moving averages. The moving average on the top is a moving average of period 35, applied to high. The middle one is a moving average of period 35 which is applied to closing price. The moving average which is at the bottom is a moving average which is applied to low.
- MACD
It is not necessary to explain what a MACD indicator does because almost everyone knows about this indicator. MACD can be used to study the strength of bulls and bears. When the histogram bars are in positive territory it indicates the stronger bull’s position in the market whilst the histogram in negative territory indicates the bear’s control in the market.
- Bbands Stop
This indicator appears above and below of the price chart. Blue color Bbands stop are good signals for buyers and vice versa.
Buying Conditions Using Trend Catcher.
- Wave of moving averages should be trending higher.
- Price should be above the 35- moving average channel.
- Bbands Stop should appear below the price.
- MACD should be in the positive territory.
- Place your stop just below the recent swing low.
- Take your profits when the price falls down to touch the 35-moving average channel.
Selling Conditions Using Trend Catcher.
- Wave of moving averages should be trending lower.
- Price should be below the 35- moving average channel.
- Bbands Stop should appear above the price.
- MACD should be in the negative territory.
- Place your stop just above the recent swing high.
- Take your profits when the price rises above to touch the 35-moving average channel.
Open demo account to test this system.
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