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Basic Forex Trading System with Momentum Indicator - Forex Function

Basic Forex Trading System with Momentum Indicator

Last Update: 04 January,2017
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Momentum indicator is very effective to find out the sentiment of the market price. It helps to get idea about market strength. In this simple trading strategy, you can find trading signal with the help of momentum indicator. Here we will discuss about momentum indicator setup process and buy-sell setup rules with example.

Required Indicator:

1. Momentum Indicator.

Buy Setup Rules:

✔Market should start uptrend rally.
✔Momentum indicator needs to cross 100 level from lower to upper.
✔Candle should be bullish to fulfill the condition of this strategy.
✔Place buy order after closing the bullish candle.

Sell Setup Rules:

✔Market should start downtrend rally.
✔Momentum indicator needs to cross 100 level from upper to lower.
✔Candle should be bearish to fulfill the condition of this strategy.
✔Place sell order after closing the bearish candle.

Example of Buy & Sell Setup:



basic-forex-trading-system-with-momentum-indicator

In the above EURUSD H4 chart, we can see momentum indicator crossed 100 level and started bullish rally which gained 230 pips. With the rules of this strategy, another 100 pips was gained from sell setup.

Time frame:

H1 & H4 is preferable for more gain. Can be used for scalping purpose.

Currency pairs:

All trendy pair.

Take profit and stop loss:

Take profit will be 50-200 pips for h4 time frame. For lower time frame, you can set TP according to the market momentum.
Stop loss will be 30-60 pips. You can set SL on swing high or low

Risk warning:

This strategy works well on trend market. If you want to use this strategy in your live account, you need to make practice on demo. You must need to follow proper money management during using this strategy.

Momentum Indicator Setup:

1. Follow the setup process. Insert>Indicators>Oscillators>Momentum>
2. Add 100 level according to below example picture.

Example of Setup Process:



momentum-indicator-setup-process


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