Easy Pullback Strategy | Forex indicator download- MT4/MT5 resources
I have been using a number of pullback strategies over the past few years and have done well with them, I am currently working on a FTMO review and hope to pass that soon.
The thing is, over the years, as many traders have done, I have been trying to get better at timing the market and increasing my RR ratio.
As I traded various methods of "catching" pullbacks, I began to think about "dealing with" the noise rather than avoiding it, and began to realize some "flaws" in my entry criteria.
I think the noise now is mostly being called manipulation etc by ict/smc traders.
Even though I studied ICT and SMC and traded without indicators and nothing but price action on the charts, I realized that I didn't want to be a slave to the charts, I was already a slave to the business where I usually worked 14 hours a day
I don't want to wait for lower time frames to set, don't want to wait for liquidity from London or Asia sessions etc... What I really want is to open my mt5 app and know at a glance where and how to take action.
My trade is similar to the "Easy Retracement Strategy" I created around 2019 and there is a thread about it somewhere on Forex Factory.
I'm using a simple approach that follows these rules:
General rules:
4 hour chart
EMA: 20 and 50
Random: %K: 10, %D: 2, Smooth: 3 (Simple - Off/Off)
A+ setup: The stoch crossover should be at the overbought/sold level (80/20), the closing price of the candle forming the stoch crossover should be between the EMAs,
B+ setup: For shorts, the crossover should not occur below the moving averages, for longs, the crossover should not occur above the moving averages
Be sure to verify your entries using the D and W timeframes, if D/W both have long EMAs then it's probably not a good idea to short the 4 hour.
Entry model and features:
Model 1:
First, for this entry model we should have a clean up or down leg, preferably no opposite candles, the less the better.
In this case, after the cross os stoch, we should place the Fib from the highest upper shadow down to the shadow of the closing candle that formed the stoch cross.
The entry price should be 78fib and the stop loss price should be 123.6.
Model 2:
After this situation, the entry point is located at fib 111.8 or -11.8 and the stop loss is located at 138.2,
When buying, you should place the small fibers starting from the top up to the wick of the candle. You should place the small fibers from the bottom to the wick of the candle for selling.
You can see that here we have a "complex" push rather than a "clean" push, this is more of a subjective approach but over time you will notice it.
The idea of this entry model is to "deal with" the noise/manipulation, meaning that even if the stoch crosses, we should not enter on the breakout of the low/high of the candle, but wait for liquidity to happen, place orders above/below the candle, refine our entry, and increase our RR
The average RR is 1:4. Tried using daily and weekly emas, but looking at only 4 hours mechanically works great!
Note: As you might backtest, you would "enter on a candle breakout, which would give me 1:2 here, 1:3 here and so on..." You can adjust your entry model in a way that works best for you, but I trade this way because I don't like entering trades without manipulation, rather than entering and being stopped out.
break even:
I currently place my orders on BE, it will save us a lot once stochastic reaches another "over cenario" area with two lines, as we can never be sure when the market will form HL or LH and reverse.
Obs: I find Model 1 riskier as I prefer to wait for manipulation before entering a trade, but once I have a "clean" leg I usually enter simultaneously.
The thing is, over the years, as many traders have done, I have been trying to get better at timing the market and increasing my RR ratio.
As I traded various methods of "catching" pullbacks, I began to think about "dealing with" the noise rather than avoiding it, and began to realize some "flaws" in my entry criteria.
I think the noise now is mostly being called manipulation etc by ict/smc traders.
Even though I studied ICT and SMC and traded without indicators and nothing but price action on the charts, I realized that I didn't want to be a slave to the charts, I was already a slave to the business where I usually worked 14 hours a day
I don't want to wait for lower time frames to set, don't want to wait for liquidity from London or Asia sessions etc... What I really want is to open my mt5 app and know at a glance where and how to take action.
My trade is similar to the "Easy Retracement Strategy" I created around 2019 and there is a thread about it somewhere on Forex Factory.
I'm using a simple approach that follows these rules:
General rules:
4 hour chart
EMA: 20 and 50
Random: %K: 10, %D: 2, Smooth: 3 (Simple - Off/Off)
A+ setup: The stoch crossover should be at the overbought/sold level (80/20), the closing price of the candle forming the stoch crossover should be between the EMAs,
B+ setup: For shorts, the crossover should not occur below the moving averages, for longs, the crossover should not occur above the moving averages
Be sure to verify your entries using the D and W timeframes, if D/W both have long EMAs then it's probably not a good idea to short the 4 hour.
Entry model and features:
Model 1:
First, for this entry model we should have a clean up or down leg, preferably no opposite candles, the less the better.
In this case, after the cross os stoch, we should place the Fib from the highest upper shadow down to the shadow of the closing candle that formed the stoch cross.
The entry price should be 78fib and the stop loss price should be 123.6.
Model 2:
After this situation, the entry point is located at fib 111.8 or -11.8 and the stop loss is located at 138.2,
When buying, you should place the small fibers starting from the top up to the wick of the candle. You should place the small fibers from the bottom to the wick of the candle for selling.
You can see that here we have a "complex" push rather than a "clean" push, this is more of a subjective approach but over time you will notice it.
The idea of this entry model is to "deal with" the noise/manipulation, meaning that even if the stoch crosses, we should not enter on the breakout of the low/high of the candle, but wait for liquidity to happen, place orders above/below the candle, refine our entry, and increase our RR
The average RR is 1:4. Tried using daily and weekly emas, but looking at only 4 hours mechanically works great!
Note: As you might backtest, you would "enter on a candle breakout, which would give me 1:2 here, 1:3 here and so on..." You can adjust your entry model in a way that works best for you, but I trade this way because I don't like entering trades without manipulation, rather than entering and being stopped out.
break even:
I currently place my orders on BE, it will save us a lot once stochastic reaches another "over cenario" area with two lines, as we can never be sure when the market will form HL or LH and reverse.
Obs: I find Model 1 riskier as I prefer to wait for manipulation before entering a trade, but once I have a "clean" leg I usually enter simultaneously.
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