The Trend Breaker Strategy
This strategy uses three indicators which are the following:
1. MACD- The inputs for this indicator are: Fast Length= 12 (represents the previous 12 bars of
the faster moving average), Slow Length= 26 (Represents the previous 26 bars of the slower moving average), and Signal Smoothing= 9 ( represents the previous 9 bars of the difference between the two moving averages. This is plotted by vertical lines called a histogram).
2. Simple Moving Average- The inputs for this indicator are: Length 8, Offset 0.
3. Exponential Moving Average-The inputs for this indicator are: Length 20, Offset 0.
This strategy also uses three different time frames. They are the 15 minute time frames. This top down approach uses these time frames to identify a trend, find a break out point, determine an entry point, and execute the trade.
These 4 things must happen to enter a trade :
1. Simple Moving Average Must Cross below the Exponential moving average.
2. MACD must cross.
3. The price must break below or above trend line.
4. After the break of the trendline you must wait for 3 candles to close on the 15 minute chart
before taking your entry.
Now we need to identify a point of entry. To identify a point of entry always use the 15 minute time frame in this strategy. So in our example below, we see that there is an obvious stand-off between buyers and sellers on the trend line.
Once there is at least three candle sticks above or below the trend line, you execute the trade.
This Trend Breaker Strategy is simple and yet effective. There is no need to stress and worry that you made the wrong trade. You follow the rules and do not let anything else make you back out of a trade.
If it follows the rules, execute the trade with confidence.
Always remember to only be risking no more than 2% of your account!
This will help you identify daily trends and points where they break. There is no need to force yourself
into a trade. If it does not follow your rules and guidelines then search for another pair to trade.