The trend is our friend.
But... what is the trend? How to track the trend? There will be dozens of methods.
Today I'll make a brief introduction of my Algo Trader System, which could well define and track the trend on 60 min and 240 min chart.
It was created and backtested in Esignal.
I just translated it into MT4 for several days.
The logic of Algo Trader includes price action, pivot and my own trend following method.
It could work on 9 pairs (H1 and H4 timeframe)：
EURUSD, DXY, GBPUSD, USDJPY, AUDUSD, NZDUSD, USDCAD, Spot Gold, WTI Oil
The basic logic are the same, but the calculation method and filters are different for every pair and every timeframe.
Chart 1: Algo Trader System (Click on the image to enlarge)
1. When short term trend, medium term trend and/or long term trend all turn green, and the price also closed above the upper bands, this should be a perfect buy opportunity, exit on price close below lower bands.
(The stop loss level could also be 5 pips below recent swing low)
Chart 2: Perfect buy trade setup (Click on the image to enlarge)
2. When short term trend, medium term trend and/or long term trend all turn magenta, and the price also closed below the lower bands, this should be a perfect sell opportunity, exit when price close above upper bands.
(The stop loss level could also be 5 pips above recent swing high)
Chart 3: Perfect sell trade setup (Click on the image to enlarge)
3. Timeframe:
H4--Medium term trade
H1--Intraday short term trade
Chart 4: Intraday short term trade setup (Click on the image to enlarge)
4. Combined H1 and H4 timeframe, we could well read the market.
Chart 5: Recent EURUSD Moving (Click on the image to enlarge)
5. Combined with Elliottwave theory to maximize profit and avoid potential immature entries
For a long time, I traded on manually Elliottwave analysis and look for top and bottom signs at potential turning points.
After Algo Trader system was created, I find the whole work becomes very easy.
To my experience, try to trade wave 3 and wave 5 should be more profitable.
Now let's see recently USDJPY uptrend from 104.63 to 111.39.
After all the candles are flagged on the chart, we find it is a textbook 5 wave rally.
However, it is extremely hard to identify it during the trend developing.
Combined with Algo Trader system, we could pick most of the movement in wave 3 and wave 5.
Also could avoid the sell trade of a potential double top formation in wave 5.
Chart 6: track the movement of wave 3 (Click on the image to enlarge)
Chart 7: identify wave 5 (Click on the image to enlarge)
We provide Daily FX Report, Trade Copy, Email Alert and MT4 EA Rental. Free trial and 30 Days Money Back policy will be valid forever! All the services could be Free
Editors’ Picks
EUR/USD consolidates around 1.0900, bullish bias remains ahead of key US data
The EUR/USD pair is seen consolidating its strong gains registered over the past two days and oscillating in a narrow band during the Asian session on Tuesday. Spot prices currently trade around the 1.1900 mark, just below an over one-week high touched the previous day.
GBP/USD edges lower below 1.3700 on UK political risks, BoE rate cut bets
The GBP/USD pair trades on a weaker note around 1.3685 during the European session on Tuesday. The Pound Sterling edges lower against the US Dollar amid political risk in the United Kingdom and rising expectations of near-term Bank of England rate cuts.
USD/JPY drops toward 155.00 as focus shifts to US data
USD/JPY meets fresh supply and inches closer toward 155.00 in the Asian session on Tuesday. The Japanese Yen holds the upper hand over the US Dollar after Japanese Prime Minister Sanae Takaichi led the ruling Liberal Democratic Party to a historic landslide win and on intervention talks. Traders brace for key US economic data that could offer more clues on the Federal Reserve's monetary policy.
Editors’ Picks
AUD/USD consolidates below 0.7100 on broad US Dollar weakness
AUD/USD is consolidating below three-year highs of 0.7099 after a strong break above the 0.7000 psychological level for the first time since February 2023, supported by the Reserve Bank of Australia's hawkish monetary policy stance and broad-based US Dollar weakness.
USD/JPY drops toward 155.00 as focus shifts to US data
USD/JPY meets fresh supply and inches closer toward 155.00 in the Asian session on Tuesday. The Japanese Yen holds the upper hand over the US Dollar after Japanese Prime Minister Sanae Takaichi led the ruling Liberal Democratic Party to a historic landslide win and on intervention talks. Traders brace for key US economic data that could offer more clues on the Federal Reserve's monetary policy.
Gold: Will US Retail Sales data propel it above $5,100?
Gold hovers below weekly highs of $5,087 early Tuesday, await US Retail Sales data. The US Dollar enters a downside consolidation phase amid persistent Japanese Yen strength and worsening labor market. Gold settled Monday above $5,000, now looks to take out $5,100 amid bullish daily RSI.
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