This SWING strategy is a trend following system. Based on pullbacks in any market.
As every IAB strategy, this is also a very accurate and generates a very high RR ratio.
Time Frame: H4 only!
Financial Markets: GOLD, OIL, FOREX, INDEXES, STOCKS
Metatrader Indicators (all non-rapaint):
IAB Channel
IAB Trend Swing
Stochastic (standard settings; 5,3,3,Low/High,Simple)
Trading rules IAB SWING
Buy:
- When IAB Trend Swing changed from red to white
- When IAB Channel made a new low (not perse a lower low, just a low)
- When Stochastic was/is oversold during the creation of the low and make a cross up
- The trigger bar didn't make a new low but the channel becomes horizontal/flat
- Trigger bar didn't close near the channels overbought region
- Open 2 buy orders on the open of the next bar
Sell:
- When IAB Trend Swing changed from white to red
- When IAB Channel made a new high (not perse a higher high, just a high)
- When Stochastic was/is overbought during the creation of the high and make a cross down
- The trigger bar didn't make a new high but the channel becomes horizontal/flat
- Trigger bar didn't close near the channels oversold region
- Open 2 sell orders on the open of the next bar
Exit position
Mostly > RR 1:2 to 1:5
Stop loss is 5 pips below or above the channel with a minimum of 50 pips.
The price needs to breathe to grow.
For 1st order the target is 3 times the SL. When it reached the first target and is closed,
move the stop loss for the remaing target to entry + original sl (50 pips or more).
Trail your SL with the original SL. Example when first order closed in profit:
for the remaining order; move SL to entry + 50 pips. This way the position have a 100 pip buffer.
When the price goes in your favor for another 50 pips, move your SL to entry + 100 pips.
When the price goes in your favour again for at least 50 pips,
put your final SL to entry + 150 pips. As you noticed, this is exactly the first take profit level,
The price is allready in your favor for 300 pips. Close the position only if the bar closes in the
opposite oversold/overbought region of the IAB Channel. Study the pictures
and all will be clear and simple.
Note:
This strategy is ideal for those who are willing invest some time to undestand this system.
Eventually you do not have to sit hours in front of your terminals. Couple of minutes a day
could do the job for you. Enough oppertunities in a month. Don't trade every oppertunity
in the same trend though. Max 2 times. When you trade the clear signals and get a SL,
don't get messed and confused. You did well anyway! Just apply the strategy / rules
on the next clear signal. In the end it is important that you gain more than that you lose and
your risks are low, balanced and clear. Calculate your risks before entering the markets.
I suggest to use no more than 1% in total risk of open positions at the same time. This would be
a nice money managers approach. As tip i suggest to know your risks on the strategy in detail:
what outcomes could exist?
For instance:
- Losing trade, you lose max 1% of your account. Probably 2 x -50 pips = -100 pips total
- Semi 'winning' trade1, you gain at least 2% of your account.
Probably 1 x +150 pips (TP1) and 1 x +50 pips (entry + SL x 1) = +200 pips total
- Semi 'winning' trade2, you gain at least 2.5% of your account.
Probably 1 x +150 pips (TP1) and 1 x +100 pips (entry + SL x 2) = +250 pips total
- Semi 'winning' trade3, you gain at least 3% of your account.
Probably 1 x +150 pips (TP1) and 1 x +150 pips (entry + SL x 3) = +300 pips total
- Winning trade, you gain at least
> 3% of your account to an average of 5% based on live trades only
