The FX markets may be an emotional rollercoaster. Traders would get an emotional high anytime their equity was positive. Then comes the inevitable decline. Traders’ earnings would begin to dwindle, and their moods would grow sour as a result. The majority of traders are not immune to this. Only people with a strong proclivity to spend money or gamble would likely experience no sorrow while losing money.
Those who can resist feeling that elation and agony when their accounts move unpredictably, on the other hand, tend to make more money trading the forex markets. This is most likely because they are stress-free and can think more clearly and objectively.
Win streaks and drawdowns are common occurrences in the trading world. You would occasionally win and occasionally lose. The crucial thing to remember is that the end result is still an income. Profitable traders would wind up in the green if probability played out and trade plans were performed correctly.
These traders frequently adhere to a method. This enables them to make judgments quickly and without hesitation. They understand that their move might result in a victory or a loss. They should be OK as long as they win larger or more frequently.
The Free Flow Forex Trading Approach is a systematic trading strategy that helps traders decide whether to buy or sell. It is built on a synergy of trend reversal signs and momentum, providing a high possibility that price will trend strongly in one direction.
MA Trend Indicator
The MA Trend indicator is a trend-following indicator that uses a mixture of modified moving averages to determine the direction of the market.
This indicator displays four moving average lines that move in opposite directions. These moving averages are intended to move like a channel, causing a certain hue to be on the inside or outside of the channel.
Purple moving average lines go to the outside in a positive trending market, whereas yellow moving average lines move to the inside. During a bearish trend, the purple line would travel towards the inside of the channel, while the yellow lines would move towards the outside. Such color reversals suggest a possible trend reversal.
Free Scalping System Indicator
The Free Scalping System technical indicator is a trend following oscillator.
It is a straightforward oscillating indicator that displays histogram bars to indicate trend direction. Positive bars are lime-colored, whereas negative bars are red. A bullish trend bias is shown by positive bars, whereas a bearish trend bias is indicated by negative bars.
Traders can use this indicator to detect a trend reversal. Such signals can be derived from the movement of the bars from positive to negative or vice versa. Typically, the first few bars give better results since there is more area for price to change.
This indicator may also be used as a trend direction filter indicator by traders. When the market is moving, traders can trade short-term momentum bursts during retracements. Traders can eliminate transactions that are not in sync with the current trend direction, as shown by the Free Scalping System indicator.
Although it is referred regarded as a “scalping” indication, it may be employed in any era. This also means that day traders and swing traders may utilize it if they apply it to their timeframes.
Trading Strategy
This trading method relies on the MA Trend indicator’s trend reversal and momentum signals, as well as the Free Scalping System indicator’s confirmation of a trend reversal.
A momentum candle on the MA Trend indicator should cross and close forcefully on the other side of the MA Trend lines. This should also correspond to the crossing of the moving average lines, which causes the color of the dominating trend to migrate towards the channel’s edge.
The bars should then cross zero on the Free Scalping System indicator, causing the bars to change color and verifying the direction of the new trend.
Based on this technique, confluences of these signs that are tightly aligned would qualify as a trend reversal indicator.
Indicators:
- EMA_Trend_Indicator
- Freescalpingindicator
Preferred Time Frames: 30-minute, 1-hour, 4-hour and daily charts
Currency Pairs: FX majors, minors and crosses
Trading Sessions: Tokyo, London and New York sessions
Buy Trade Setup
Entry
- The Free Scalping System bars should shift above zero and change to lime.
- The MA Trend indicator lines should hook up and crossover causing the purple lines to move outside of the channel.
- A bullish momentum candle should close above the MA Trend indicator lines.
- Enter a buy order on the confluence of these conditions.
Stop Loss
- Set the stop loss below the MA Trend lines.
Exit
- Close the trade as soon as price closes below the MA Trend lines.
- Close the trade as soon as the Free Scalping System bar shifts below zero and changes to red.
Sell Trade Setup
Entry
- The Free Scalping System bars should shift below zero and change to red.
- The MA Trend indicator lines should hook down and crossover causing the yellow lines to move outside of the channel.
- A bearish momentum candle should close below the MA Trend indicator lines.
- Enter a sell order on the confluence of these conditions.
Stop Loss
- Set the stop loss above the MA Trend lines.
Exit
- Close the trade as soon as price closes above the MA Trend lines.
- Close the trade as soon as the Free Scalping System bar shifts above zero and changes to lime.
Conclusion
This trading method is a trend reversal approach in action. It is linked to moving average crossovers in some ways. The distinction is that it integrates strong momentum price movement as a confirmation as well as several moving average lines in one indicator.
The MA Trend indicator and the Free Scalping System indicator work in tandem. When they are in confluence, they tend to generate reliable trend reversal signs.
Traders who can grasp watching price movement, momentum, and trend reversals would gain substantially from this trading approach.
