strategy forex Weighted Taylor
strategy forex Weighted Taylor is based on the use of weighted moving average (WMA) and was designed to trade only on the daily charts and initially for the currency pair EURUSD . Therefore, you should use it to trade at time intervals of less than D1, but if you do not fit this interval, and you wish to trade on smaller time frames - you should analyze the behavior of this forex strategy at intervals that are suitable for you and may make additional changes to the configuration of indicators.
Also, if you think that the size of your deposit forex is not large enough to trade on the daily ranges - I advise to use for this smaller size of transactions (eg 0.01 lot) or Cent account forex .
Strategy Forex Weighted Taylor - Taylor Weighted is based on 3 main indicators forex (all of them are present by default in MT4), which interact together to give traders all the necessary information for lucrative trade:
1) we use the 5 weighted moving average (WMA), which provide an excellent visual representation of what the current situation in the foreign exchange market.
2) The graph of the RSI indicator helps to make the right decisions.
3) Finally, the inputs and outputs to / from the market, we will use the MACD indicator (MACD).
For weighted moving average (Linear Weighted Moving Average) should use the following settings:
method MA - Linear Weighted, period moving average:
- 5 color blue
- 15 color orange
- 30 color yellow
- 60 color pink
- 90 color red
Indicator RSI - The period of 13, set the level 2 (red) - 60 and 40.
MACD indicator (MACD):
Fast Moving Average - EMA 5 Slow Average - EMA 13
MACD-Simple Moving Average SMA 1.
It should also be set level 2 (red) - 0.005 and -0.005.
Approximately schedule should look like this, after all installations:
conclusion of the transaction on the forex strategy Weighted Taylor:
In Figure 2 you can see the two prisoners of the transaction. And although their conclusion took sufficient amount of time, but remember that the profit earned worth the wait for this lucrative deal , but do not lose their funds on deposit in forex, and then a very long time to recover it.
- 5 Moving Average
Moving averages provide a visual representation of what is happening at this moment in the foreign exchange market. The logic of their applications based on the intersection of short-run average long-term MA to open up a trading position.
- indicator RSI
Now look at the chart with the indicator of RSI. The logic of this forex indicator is known to all and is simple enough. Conducted two horizontal lines at levels 60 and 40. Between these lines indicated, we do not sell, because as soon as forex indicator is located in this zone, the currency market is usually a lot of noise and very little sustainable trend, allowing to take their pips profit. This position indicator forex also say that the foreign exchange market has no clearly defined trend. Of course, you can trade between these levels, but I would not recommend to do it.
As forex indicator RSI outside the redistribution of the red zone, which was formed by 2 red levels of 60 and 40, it indicates to us the possibility of further development of the market trend - and from this it follows that we must be ready to deal. As soon as the RSI breaks its top line and moves upward, it indicates an uptrend, and if the indicator forex breaks down a level and moving down the same way, it points out the trend downward.
- MACD indicator (MACD)
settings indicator MACD 5,13,1. This forex indicator will be useful to us for making a good entry into the market and the implementation of the outputs from it. Also note that once the columns of the histogram are located within the "red zone" - not to be traded. The reason is exactly the same as for forex indicator RSI. Zone, which limited the levels of red, is used to filter noise in the market. As soon as the column indicator forex MACD breaks up the red level - it is a signal for opening a trading position to buy, but as soon as the column indicator MACD breaks down his red level, this suggests that we should open a trading position for sale.
unites all together:
Consider first the bargain, as shown in figure number 2. We have been open sales positions. As seen on the top chart, blue line is below , for it is orange and yellow moving average, which also differ from the average pink and red. At the same time on the chart of the RSI indicator light struck down a red level and directed downward, suggesting the formation of the downward price trend. At the same time on the chart the MACD indicator, columns, struck the red level and sent down the same way, it also confirms the previous trading signals and a signal at the entrance to the market. So it is here that we conclude the bargain.
Now, when our trading position is open, let's answer the question, when will need to close it? As already mentioned, and - all the graphics are used to identify entrances and exits from the market. Let's look at the information you submit to us a point out of the market. In this case shows two possible exit from the market. The blue line of the RSI indicator starts to move upwards. Then the line of the RSI indicator returns to its "red zone" and finally the MACD indicator is also returned to their "red zone". This is where to close our bargain .
Now let's analyze the 2nd of sale transaction. On the possibility of concluding a long trading position indicates, first, the blue moving average, which is located on top, followed by orange and yellow moving averages, which are also at odds with pink and red moving average. At the same time index forex indicator RSI broke its red level up and moves upward, the columns of the MACD indicator broke through his red level and just move over. In this case also there are 2 possibilities, where you can close our open bargain. The reason for the closure of the following: the RSI is returned to the area bounded by its red with 2 levels, but by that time the MACD indicator is still beyond their levels. In the 2nd version is out of the deal can be done as soon as the MACD indicator bars punched his red level.
Let's just examine a few simple examples so you learn to identify patterns for transactions and exit.
Figure 3. 1st trade deal - the opening of trading positions on a purchase. It should be noted that the blue moving average located at the top, followed by the same followed by orange and yellow is average. And while they disagree with pink and red high. At the same time RSI breaks up the red level, as well as the MACD indicator. Ie at the same point on the graph converge all three trading signal for the opening of trading positions on a purchase. And just like in the previous 2 cases, there is the same 2 options for closing an open transaction. 1st vertical level coincides with the return of the RSI indicator in its "red zone", the 2nd the same vertical line coincides with the return of their "red zone" indicator MACD.
Figure 3We continue to explore
Figure 3. 2nd trade deal - a short trading position, but let us take a closer look the trading signals. Although the blue moving average is not located on the bottom, blue and yellow moving average broke through the pink, which already indicates the main trend reversal on the daily chart. Second, the RSI has struck down the red level and moves downward as well, and a column indicator MACD also struck down a red level.
Let posmotrimte into zones, which circled. In these areas the RSI and MACD indicator returned to his red border, which are marked red levels, but why were not close a position at this point? So the reason for this is to move our set of moving averages: the average is not broke orange yellow middle, in a time when the average rose is still going down, almost without suffering the influence of this spike up on the chart. Output is a trading position at the point where that is shown by the letter S.
Well, now let's look at the latest bargain in Figure 3.
We open a trading position to buy when the blue and orange moving average breaks above the pink and red moving average. At the same time the RSI broke up his red level and moves in an uptrend, the same as we have seen in the histogram and the MACD indicator.
And now let us examine the transaction in Figure 4.
1st long bargain is formed as soon as the blue AI is at the top, the RSI breaks up his red level, at the moment, as the MACD indicator also breaks his red level up. Closing an open transaction occurs at the point, as indicators RSI and MACD are returned to their "red zone". Conclusion next trading "short" transaction shown in the place where the average is blue on the bottom, but the RSI and MACD indicator punched down his red levels, and move down as well. Closure of the bargain is made, as only indicators RSI and MACD back again the same in their "red zone". The latter deal in the figure 4 - is a short trading position. All the conditions for open positions were carried out - the blue line on the bottom, the RSI breaks its red level down, the MACD indicator red level breaks down as well. Closing of the transaction occurs as soon as indicators RSI and MACD are returning to their "red zone".
yellow horizontal levels on the charts give you a chance to see how many points you can earn profits on each open transaction.
In Figure 5 we see a bargain, which earned 200 points in three trading weeks!
I hope that the description of the strategy forex Weighted Taylor It was very easy to understand and it does not require much effort to implement in your trading account!