Profitable Forex strategies for non-standard indicators 1

Profitable Forex strategies for non-standard indicators 1

Once again, I focus on the fact that the effectiveness of strategies depends solely on the skill of the trader, the ability to see signals and analyze the market.

Indicator I_XO_A_H and a strategy based on it

Most traders prefer to trade according to the classic line chart, without going into details of other options built into the trading platform. But in vain. The graphical trading system “Tic-tac-toe” is one of the analytical options for reflecting the movement of prices, by which you can judge the direction of a strong trend. The time interval does not play a role here if the price has passed a certain number of points up (for what period of time it doesn’t matter), a cross is displayed, and a down sign shows zero. This type of charts is not combined with indicators of trading volume, but has several advantages:

  • ignores insignificant price changes (price noise and minor corrections)
  • not attached to a time period;
  • allows you to find trend lines, easily distinguishable levels of resistance and support;
  • makes it possible to pay more attention to a long-term trend.

This strategy uses the indicator I_XO_A_H together with candlestick analysis. I_XO_A_H is a combined template indicator, which is an attempt to convert the “Tic-Tac-Toe” graphic system into a histogram. The trading system itself is not used here directly (it is visually complicated for those who are used to candlestick and linear charts), but I_XO_A_H perfectly interprets its indications. 

Trading conditions for the strategy:

  • asset – EUR / USD ;
  • timeframe – M30;
  • indicator settings: BoxSize = 15. 

The indicator contains the so-called reverse coefficient (equal to 2 and does not change). It represents the number of “boxes” (squares), after passing through which in the opposite direction there is a change of crosses to zero (a new row) and vice versa.

In this figure, the size of the “box” is 10 points. If the reverse is equal to “2”, then when the price drops, for example, from 1.0350 to 1.0330, a change from a cross to a zero will occur. If the price drops by only 10 points, the graphics system will weed out this movement as price noise. In the indicator I_XO_A_H, the size of the box size box is 15 points in a five-digit display (or 1.5 points in a classic four-digit display of the exchange rate of any currency pair). 

At first glance, the system seems complicated. That is why I recommend the indicator I_XO_A_H, in which all its nuances are already taken into account.

The principle of opening a buy position:

  • trading is conducted from 10 a.m. to 8 p.m. Eastern European time;
  • I_XO_A_H draws 5 columns of a red tint in a row, with each following more than the previous one;
  • I_XO_A_H draws a column of green tint. On the next candle, you can try to open a deal.

With a short position, everything is mirrored. Upon reaching a profit of 10 points, close 50% of the position and ensure the balance with trailing. 

Strategy Recommendations:

  • if I_XO_A_H drew only 4 columns of the same color in a row, then it is better not to open a deal (not enough reversal signal);
  • if there are columns of the same length, it is better not to open a deal. 

However, these are more likely recommendations for minimizing risk, as these positions can turn out to be profitable. You can increase the timeframe to H1, but then you will need to select the length of the stop and trailing, for example, slightly increasing them.

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