In this article, we will overview some most popular indicator strategies for trading in Forex. These trading strategies suggest using several indicators for finding entry points to the market.
This indicator strategy implies scalping on M1 and M5 with the help of signals from several indicators. Trades are opened and closed on M1, while M5 is used for filtering entry points. The indicators used are the TMA, TMA Size, CTF, Currency Power Meter, SSRC, HP DIFF.
The main instrument for this strategy is EUR/USD but other pairs can be used as well. The parameters of this strategy are customizable depending on your trading style. You can start with basic settings to detect strong and weak points of the strategy and check if such an aggressive trading style suits you.
In our blog, we have an article devoted to the strategy: “Victory Trading Strategy: Scalping on Minutes”.
Ichimoku + Awesome Oscillator
This is a classic approach based on a trend indicator supplemented with an oscillator. The strategy in question uses Ichimoku Kinko Hyo and the Awesome Oscillator, respectively. Ichimoku Kinko Hyo is a good trend indicator showing the actual market trend. Meanwhile, the Awesome Oscillator helps to evaluate the deviation of the price from its average values.
The strategy will give signals at corrections or trend reversals. Its authors and active traders say such signals are valid for any currency pairs, majors or less popular ones. For market entry, H1 is normally used but you can experiment with other timeframes as well.
You can also find an article about this strategy: “ Trading with Ichimoku and Awesome Oscillator”.
This strategy is meant for larger timeframes — basically, D1, but you can try switching to H4 or H1. Trading on larger timeframes requires patience: entry signals take time to form. A special indicator draws trendlines; the trader needs to filter their breakaways and open positions.
This strategy works with practically any currency pair or cross-rate; you can also try it with metals. Normally, the trader checks signals and makes trading decisions once a day. If you still want to use smaller timeframes, choose the US or European sessions because they are the most volatile.
See a more detailed description of the strategy in “How to Trade Fishing Daily Strategy?”.
Alligator + Fractals
This strategy was designed by a famous analyst and successful trader Bill Williams in the 20th century, yet it remains topical. Alligator + Fractals is a trend strategy, which means that it demonstrates the best results in a trend, giving losing signals in flats.
The strategy is multicurrency but observations show that it works better with instruments with small spreads, such as all currency pairs and metals. You can use any timeframe but remember that on timeframes from H4 and larger signals will have higher quality but appear rarer.
For more details, check “Trading the Alligator + Fractals Strategy”.
Golden Cross is a trend strategy that works best in a clear market trend. Normally, it uses a compilation of a fast EMA with period 50 and a slow EMA with period 200. The crossing of the two EMAs and an escape from the range signals the beginning of a new trend.
Ling-term traders and investors normally use daily charts. For medium- and short-term trading, I recommend smaller timeframes — H4, H1, M15. The EMA 50 and 200 periods and basic for the strategy but you can experiment with other periods and choose those that work best in tests.
See the detailed rules of the strategy in “Trading by Golden Cross Forex Strategy”.
The Providec (Foreseer) strategy is easy to use. It has only two indicators that do not compromise the price chart. It suits any currency pair or other instruments (futures, stocks, CFDs) from the MetaTrader4 and MetaTrader5 terminals. The timeframe can also be any from M1 to MN.
If your timeframe is under H1, open orders in the European and US trading sessions. As soon as the US session ends, you must close all trades whatever the result. Meanwhile, if you trade on H1 and higher (H4, D1), you can stay in the market at any time of the day.
Check the detailed description of the strategy in the article “Providec Trading Strategy: Simple Strategy for Beginners”.
The strategy is based on the Pivot Points indicator. The latter appeared in the 1930s when a mathematician and famous trader of that time Henry Chase decided to create an indicator for the stock market. The indicator is based on the idea that the market accounts for everything, and history repeats itself.
In particular, the indicator functions on the notion that the closing and opening prices of a candlestick can serve as support and resistance levels in the future. On the chart, Pivot Points look like horizontal lines and support/resistance levels are dashed by default (you can change their color and style in the settings).
The strategy is described in “Getting Acquainted with Pivot Points”.
All the indicator strategies above have their peculiarities and require detailed studying. Keep in mind that no potentially profitable method can guarantee a positive result at any moment. The market is prone to change, and so our strategy results, a profitable scheme might stop being profitable at any time. Try testing several strategies on a demo account and choose one that works best for you.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex