MACD and Inside Bar
Forex strategy on the MACD and Inside Bar
Forex strategy on the MACD and Inside Bar - a simple strategy of following the trend movement already formed in the forex market, currency pair - either by a time interval can be chosen so as desired, as these patterns are formed on all ranges.
Formation Inside Bar (inside bar) - the case when there is a bar chart (candlestick) with a lower high and also a higher low than the previous bar graph. Usually, this pattern is interpreted as a small respite in the forex market, at a time when the market is in a state of uncertainty of further price movement. The breakdown is this "inner bar" is usually quite volatile movement.
Conclusion deal to buy :
MACD indicator located above the zero line - above the maximum price formed the "inner bar" have a pending order buy stop (+ value spread). Ie From this it follows that we expect the breakdown of the prices up, because MACD indicator is currently in the shopping area.
In cases when the MACD indicator is below zero and there is an "inner bar", then we only sell order at the lowest price + value spread.
safety stop-loss hosts a minimum of "Inside Bar" for the transactions for the purchase and a maximum of "Inside Bar" for the transactions for the sale. Although this value is usually small, but it is quite sufficient for trading on the forex strategy and the ratio of risk to reward ratio is very good.
Go on the strategy recommended by the trailing stop.
important addition: should only be used inside bars in the trend direction . In the case of lateral motion of the "inner bar" should be ignored
Consider the examples in the picture:
1) MACD histogram are below a zero line, and so we have a bullish moving average MACD, besides they are the same rasspolozheny below the zero line. Correspondingly, when an inside bar, we count with a pending order to sell below the low of the inner bar. Safety stop-loss - over a maximum of the inner bar.
2) We notice that the MACD crossing happens from the bottom up and closes the histogram above the zero line. This indicates upward momentum. Correspondingly, in this case we place a pending order to buy the appearance of the inner bar. Safety stop-loss - a minimum of the inner bar.
3) in this case was set buy stop, according to all rules of the forex strategy, which also worked out nicely in this case.