Complex
Forex Trading System
is a trend momentum price action strategy.Overview
Markets Traded – Forex, only the GBP/USD
Charts – 4 Hour, 15 Minute, 5 Minute and 1 Minute
Indicators
SMA set at 21
EMA also set at 21
Stochastic set at 9, 3, 3
MACD – 12,26,9
Bollinger Bands set at 20 with standard deviation of 2
Trendlines
Support and resistanceDescription
Trades any timeframe but concentrates on the 4 Hour, 15 Minute, 5 Minute and 1 Minute charts. He looks for the same set up on each time frame. In other words, he uses the same rules to trade all time frames. He scans the chart to look for his set up on his favorite time frames and then trades that time frame.
Markets Traded – Forex, only the GBP/USD
Charts – 4 Hour, 15 Minute, 5 Minute and 1 Minute
Indicators
SMA set at 21
EMA also set at 21
Stochastic set at 9, 3, 3
MACD – 12,26,9
Bollinger Bands set at 20 with standard deviation of 2
Trendlines
Support and resistanceDescription
Trades any timeframe but concentrates on the 4 Hour, 15 Minute, 5 Minute and 1 Minute charts. He looks for the same set up on each time frame. In other words, he uses the same rules to trade all time frames. He scans the chart to look for his set up on his favorite time frames and then trades that time frame.
Setup
The first thing to do is setup your charts. First adds a 21 period Simple Moving Average and a 21 period Exponential Moving Average. He then adds the Stochastic Indicator set to 9, 3, 3. Next he adds the MACD indicator with defaultsetting of 12, 26, 9 and finally he adds Bollinger Bands set at 20 with a standard deviation of 2.
I uses support, resistance, trendlines and pivot points (his own) extensively. The whole method is based on taking action around these areas. to trade within a range. The range is defined by Obiliza as the price action in a given period. For example, if you look at the chart 1.0 below, the highest and lowest points that can be seen in a normal view is This applies to all time frames. He is looking for the highest and lowest point in the last few trading days. First he marks the lowest and highest (points) support and resistance levels that he can see. It’s a little hard to see on this chart but the resistance level is 1.4977 and the support level is 1.4474.
The first thing to do is setup your charts. First adds a 21 period Simple Moving Average and a 21 period Exponential Moving Average. He then adds the Stochastic Indicator set to 9, 3, 3. Next he adds the MACD indicator with defaultsetting of 12, 26, 9 and finally he adds Bollinger Bands set at 20 with a standard deviation of 2.
I uses support, resistance, trendlines and pivot points (his own) extensively. The whole method is based on taking action around these areas. to trade within a range. The range is defined by Obiliza as the price action in a given period. For example, if you look at the chart 1.0 below, the highest and lowest points that can be seen in a normal view is This applies to all time frames. He is looking for the highest and lowest point in the last few trading days. First he marks the lowest and highest (points) support and resistance levels that he can see. It’s a little hard to see on this chart but the resistance level is 1.4977 and the support level is 1.4474.
This
means the range is 1.4977 – 1.4474 = 0.0503 pips. This gives us a
range of 0.0503 pips. To get his pivot point, he divides the range
into two, basically drawing a line in the middle of the support and
resistance levels. Half of the range 0.0503 is 0.0251 (rounded). Take
0.0251 from the resistance level. 1.4977 – 0.0 251 = 1.4726 You
can see the Pivot Level in chart 2 , which is half way between the
resistance and support.
Next
he wants to define a “zone” of support and resistance and he gets
this by using thetechnique To get the zone, first change the chart to
a line chart and draw in the support and resistance as in chart 3.
You can see the new lines marked in red.
Chart 3 (Without Bollinger Bands)
This is the same chart with the Bollinger Bands and candlesticks back on.
This is the same chart with the Bollinger Bands and candlesticks back on.
Next
he adds his trendlines as in chart
Next
he adds a further two lines which are calculated by halving the
distance from the pivot point to the first resistance line and
halving the distance from the pivot point to the first support
line.
Resistance 2 is calculated by taking the first resistance point of 1.4997 and subtracting the pivot point of 1.4726, which equals 0.0271 pips. Divide 0.0271 by two to get 0.0135. Now subtract 0.0135 from 1.4997 and you get 1.4862. To get support 2, take the pivot point of 1.4726 and subtract the support of 1.4474, which gives you 0.0252. Now divide 0.0252 by two to get 0.0126. Now take 0.0126 from 1.4726 to get 1.4600. See chart
Resistance 2 is calculated by taking the first resistance point of 1.4997 and subtracting the pivot point of 1.4726, which equals 0.0271 pips. Divide 0.0271 by two to get 0.0135. Now subtract 0.0135 from 1.4997 and you get 1.4862. To get support 2, take the pivot point of 1.4726 and subtract the support of 1.4474, which gives you 0.0252. Now divide 0.0252 by two to get 0.0126. Now take 0.0126 from 1.4726 to get 1.4600. See chart
SYSTEM
RULES
Short Trades1. Look for a cross of the moving averages near one of our resistance lines
(point 1 on chart 2.0).
2. The stochastic should have crossed down (point 2 on chart 2.0)
3. MACD should have crossed down or already be in sell (point 3 on chart 2.0).
4. Entry is 5 pips below the support line or the trend line
5. Stop loss is 15 pips above the nearest resistance or trendline.
6. Target is the nearest support line.
A perfect trade would be when the market hits resistance and price is near the top Bollinger band as the two moving averages cross. At the same time, the stochastic and MACD cross and you get a break of the trendline. It’s like a confluence of things happening at the same time.
Short Trades1. Look for a cross of the moving averages near one of our resistance lines
(point 1 on chart 2.0).
2. The stochastic should have crossed down (point 2 on chart 2.0)
3. MACD should have crossed down or already be in sell (point 3 on chart 2.0).
4. Entry is 5 pips below the support line or the trend line
5. Stop loss is 15 pips above the nearest resistance or trendline.
6. Target is the nearest support line.
A perfect trade would be when the market hits resistance and price is near the top Bollinger band as the two moving averages cross. At the same time, the stochastic and MACD cross and you get a break of the trendline. It’s like a confluence of things happening at the same time.
Long
Trades1.Look
for a cross of the moving averages near one of our resistance
lines.
2. The stochastic should have crossed up.
3. MACD should have crossed up or already be in buy.
2. The stochastic should have crossed up.
3. MACD should have crossed up or already be in buy.
4
Entry is 5 pips above support line or trend line
5. Stop loss is 15 pips below the nearest resistance or trendline.
6 Target is the nearest resistance line.
A perfect trade would be when the market hits support and price is near the lower Bollinger band as the two moving averages cross. At the same time, the stochastic and MACD cross and you get a break of the trendline. It’s like a confluence of things happening at the same time Let’s look at a few examples: The following example is a perfect Sell setup (Obiliza’s charts). Have a look at the dashed dark blue line on the following chart at Point 1. The Blue 21 SMA crosses below the White 21 EMA. Just prior to that, the Blue SSD line has crossed below the Orange SSD line at Point 2.
At Point 3 the Red MACD line crosses below the Blue MACD line. Next, I placed my entry order 5 pips below the blue resistance line and set my target level 40 pips below the entry level. The target of 40 pips was easily achieved.
5. Stop loss is 15 pips below the nearest resistance or trendline.
6 Target is the nearest resistance line.
A perfect trade would be when the market hits support and price is near the lower Bollinger band as the two moving averages cross. At the same time, the stochastic and MACD cross and you get a break of the trendline. It’s like a confluence of things happening at the same time Let’s look at a few examples: The following example is a perfect Sell setup (Obiliza’s charts). Have a look at the dashed dark blue line on the following chart at Point 1. The Blue 21 SMA crosses below the White 21 EMA. Just prior to that, the Blue SSD line has crossed below the Orange SSD line at Point 2.
At Point 3 the Red MACD line crosses below the Blue MACD line. Next, I placed my entry order 5 pips below the blue resistance line and set my target level 40 pips below the entry level. The target of 40 pips was easily achieved.
15
Minute GBP/USD Chart.
We’ve
taken the highest and lowest points that can be seen in a normal view
as the range and then divided it to get the Pivot line. Our sell or
buy point will be either 5 pips above or below the Pivot line. Price
first moved below the Pivot line giving us a signal to Sell. The Blue
SSD line has crossed below the Orange SSD line and the Red MACD line
crossed below the Blue MACD line which confirmed the Sell signal. I
then placed my entry order 5 pips below the Pivot line. I placed my
stop loss 15 pips above the upper trendline and my Target Limit at
the nearest Support line.
As you can see, the target was easily achieved and not long after there was aBuy signal when price moved back over the Pivot line.
As you can see, the target was easily achieved and not long after there was aBuy signal when price moved back over the Pivot line.
More
Examples
The Blue SSD line crossed above the Orange SSD line and the Red MACD line crossed above the Blue MACD line which confirmed the Buy signal, so I placed an entry order 5 pips above the Pivot line. I placed my stop loss 15 pips below the lower trendline and my Target Limit at the nearest Resistance line. The Target Limit was reached not long after that.
The Blue SSD line crossed above the Orange SSD line and the Red MACD line crossed above the Blue MACD line which confirmed the Buy signal, so I placed an entry order 5 pips above the Pivot line. I placed my stop loss 15 pips below the lower trendline and my Target Limit at the nearest Resistance line. The Target Limit was reached not long after that.
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