Most traders often have the right idea which way the market is going. If you come to think of it, trade direction is just a decision between two choices, up or down. Traders could simply do a coin toss a have a 50% probability. Traders could add in a little analysis which has the right mix of not being too early or too late in a trade and they could already significantly increase their chances of making money.
But why is it that 90% of traders lose money?
There are many reasons why traders lose money in the long run. However, one of the most common reasons is that traders make irrational decisions as the market moves. This is because the forex market moves very erratically. Pressures from different sources cause each currency to strengthen and weaken, creating a tug of war in each currency pair. This is what traders call market noise.
As humans, we are often susceptible to greed and fear. These emotions cause us to make impulsive decisions which do not benefit our trading process. Traders who can minimize market noise could trade their plans much easily.
Simpler Trend Forex Trading Strategy is a trend following strategy centered around the idea of reducing market noise. This allows traders to trade in a certain direction based on confluences and hold it for as long as the trend direction does not change. This allows traders to squeeze out as much profits as they can from a trend.
Simpler Trend Indicator
Simpler Trend is a trend following indicator which identifies trend direction by comparing the current price movements with the historical price movements within a period.
The Simpler Trend indicator indicates trend direction by overlaying bars on the price chart. These bars changes color depending on the direction of the trend. Green bars indicate a bullish trend direction, while red bars indicate a bearish trend direction.
The Simpler Trend indicator works much like the Heiken Ashi Candlesticks indicator. However, unlike the Heiken Ashi Candlesticks, the Simpler Trend bars are less susceptible to market noise. Its bars do not change color too quickly whenever market noise creates irrelevant price spikes. It would only change when the market is clearly showing signs of trend reversal.
This indicator works best as a trend reversal signal indicator. Traders can simply take the changing of the color of the bars as an entry signal based on a trend reversal setup. However, it is still best to pair it with another indicator which can also confirm trend reversals. Traders could then wait for a confirmation from the other indicator in order to have a higher probability trade.
MA Angle Indicator
The MA Angle indicator is a trend following oscillator which indicates trend direction derived from the slope of moving averages.
One of the most popular ways traders identify trend direction is by looking at the slope of a moving average line. Moving averages which are sloping up indicate an uptrend, while moving averages that are sloping down indicate a downtrend.
The MA Angle indicator is based on the same concept of judging trend direction based on the slope of a moving average line.
This indicator identifies the slope of a moving average line by computing for the difference between a moving average line and its duplicate which is shifted forward.
The results are then plotted as histogram bars on a separate window. Positive bars generally indicate a bullish trend bias, while negative bars generally indicate a bearish trend bias.
The indicator also accounts for moving averages that are not yet clearly trending based on the slope of the moving average line. Markets that are still relatively flat have histogram bars that are colored yellow. Bullish trending markets on the other hand have lime green bars, and bearish trending markets have fire brick bars.
This trading strategy is a simplified trend reversal trading strategy which trades on confluences between the Simpler Trend indicator and the MA Angle indicator.
On the Simpler Trend indicator, trend reversal indications are identified based on the changing of the color of the bars it plots.
The MA Angle indicator also identifies trend direction based on the color of its bars. Instead of using the shifting of the bars from positive to negative or vice versa, we will be taking trades whenever the bars changes to lime green or fire brick. This signifies that the trend reversal is gaining momentum is more likely to reverse.
Trades are entered using stop entry orders. The stop entry orders are placed on the high of a bullish Simpler Trend bar or at the low of a bearish Simpler Trend bar.
Preferred Time Frames: 30-minute, 1-hour and 4-hour charts
Currency Pairs: FX majors, minors and crosses
Trading Sessions: Tokyo, London and New York sessions
Buy Trade Setup
- The Simpler Trend bars should change to green.
- The MA Angle bars should shift to positive and should change to lime green.
- Enter a buy stop order on the high of the Simpler Trend bar.
- Set the stop loss on the fractal below the entry candle.
- Close the trade as soon as the Simpler Trend bars change to red.
- Close the trade as soon as the MA Angle bar changes to yellow.
Sell Trade Setup
- The Simpler Trend bars should change to red.
- The MA Angle bars should shift to negative and should change to fire brick.
- Enter a sell stop order on the low of the Simpler Trend bar.
- Set the stop loss on the fractal above the entry candle.
- Close the trade as soon as the Simpler Trend bars change to green.
- Close the trade as soon as the MA Angle bar changes to yellow.
This trading strategy is a systematic trend reversal strategy which is based on the confluence of two complementary trend following indicators.
Individually, these indicators could already produce trade setups with a relatively high win probability. When combined the setups tend to work even better. Trade setups tend to result in more wins and higher profits.
Like most trend reversal strategies, it is best to use this strategy in a market that has a strong tendency to trend. Markets that are choppy or are ranging might cause some drawdowns.
This strategy also works well as an entry strategy in trade setups where traders expect a reversal on a higher timeframe support or resistance.
Forex Trading Strategies Installation Instructions
Simpler Trend Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Simpler Trend Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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How to install Simpler Trend Forex Trading Strategy?
- Download Simpler Trend Forex Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you want to test your forex strategy
- Right click on your trading chart and hover on “Template”
- Move right to select Simpler Trend Forex Trading Strategy
- You will see Simpler Trend Forex Trading Strategy is available on your Chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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