5 MINUTE "MOMO" TRADE.
Define 'the swing low' ?
-BB-
BarrowBoy:
Define 'the swing low' ?
-BB-
I couldn't find a better description than this:
A term used in technical analysis that refers to the troughs reached by an indicator or an asset's price. A swing low is created when a low is lower than any other point over a given time period. Successively lower swing lows indicate that the underlying asset is in a downtrend, while higher lows mean it is in an uptrend.
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As I have no programming skills, I thought I would ask the users of MQL4 to help me automate this profitable trading strategy I learnt from Investopedia.
It is used on the 5 minute charts only and traditinally uses only the MACD and 20EMA for entry signals.
I however thought I could add the 10EMA and the RSI and Stochastics oscillator to further improve the accuracy of the signals generated. No divergence should occur between the indicators during the time of entry.Any divergences are a sign that the market is about to change and this may imply that you TP or even tighten your SL. Any additional indicators can be used.
For a LONG trade:
i) Price must be trading above the 20EMA by 10 pips or more and the MACD must be turning from negative to positive or must have been positive within the last 5 bars. We use 5 bars because on a short time scale like this any more than 5 bars and the momentum may be nearing it's end. The 10EMA must have crossed the 20EMA upwards.
ii) Take a long position at this stage and make your Stop Loss the swing low for an aggressive trade or the 20EMA- 20 pips for a conservative trade.
Your first Take Profit should be= Entry price+(Entry price-Stop Loss)
iii) If your first TP is reached, sell half the position then move the SL to breakeven and either Trail your Stop by breakeven or sell the 2nd position at (20EMA-15 pips) whichever is higher.
For a SHORT trade:
i) Price must be trading below the 20EMA by 10 pips or more and the MACD must be turning from positive to negative or must have been negative within the last 5 bars. We use 5 bars because on a short time scale like this any more than 5 bars and the momentum may be nearing it's end. The 10EMA must have crossed the 20 EMA downwards.
ii) Take a short position at this stage and make your Stop Loss the swing high for an aggressive trade or the 20EMA+ 20 pips for a conservative trade.
Your first Take Profit should be= Entry price+(Stop Loss-Entry price)
iii) If your first TP is reached, buy half the position then move the SL to breakeven and either Trail your Stop by breakeven or buy the 2nd position at (20EMA+15 pips) whichever is lower.
I would really appreciate it if an EA preferably for this strategy is developed.