Chariot Trading Strategy

Trading tool: any
Period: any
Used indicators: Simple Moving Average (40).
Volume of the transaction: arbitrary, but always constant.
Tactics algorithm:
One of the most difficult situations in trading occurs when the price gradually increases, but sometimes makes large movements in the opposite direction. A simple technique of the Chariot (Sweet Chariot) is designed to use this kind of swings in a gradually growing market. This trading strategy is very simple, but effective in a situation where the price moves in a side trend with a general upward trend in the market. The "Chariots" system uses the usual 40-day moving average closures. It looks like this:
We prefer to use it on weekly charts, but it can also be applied on daily and intraday charts.
The trading rules used in this system are very simple:

Chariot Trading Strategy
1. When the price is above the moving average, long positions are opened.
2. Short positions in this system do not open.
3. When the price goes flat (without reversals) and fluctuates around the moving average, new positions do not open. 4. On the first candlestick, which is completely above the moving average, and which closes in the upper part of the price range:

[*] Open a long position on the first candlestick, at least 80% of the length of which is above the moving average, if it closed in the upper third of the price range.
[*] Open a long position during the breakout of the top of the candle, which corresponds to these characteristics. This candle is called the entry candle.
The following chart clearly shows the places where you can open long positions:
Chariot Trading Strategy

Chariot Trading Strategy
[*] Before the first entry candle, the price was balanced above and below the moving average. The first opportunity to enter on the chart is provided after the price has emerged from under the moving average.
[*] The candle preceding the first entry candle is above the moving average. It closed in the upper half of the price range. It signals the possibility of opening a long position, but you should enter when the level of the top of this candlestick is broken through. The same applies to the following combination of candles.
[*] The lower part of the next candle preceding the entry candle is under the moving average, however, 80% of its price range is above it, and it closes in the upper third of its price range.
[*] The candle, preceding the penultimate candle of the entrance, is divided by the middle one by about half and closed in the upper third of its price range.
[*] The candle preceding the last candle entry is above the moving average and closes in the upper half of its price range. It fully fits the parameters of the entrance candle.

A few general comments:
[*] Make sure that the price turns over and sometimes below the moving average. The more reversals, the better.
[*] Make sure that the price is trending, but not very cool (no more than 45 degrees). With a strong uptrend, the price will almost always be the moving average.
[*] Please note that the price should always be around the moving average. If this is not the case, then the Chariots technique will not be used.
If the market moves in a sideways trend and the moving average also moves in a flat, you may encounter the following difficulties, which are illustrated in the lower chart.

Post a Comment

Previous Post Next Post