Luke B Forex Trading System

In this article we are going to explain a trading system developed for the Metatrader 4 platform , which makes use of several indicators, including a series of custom indicators. It was developed to operate in the Forex market although it can be tested in other types of assets.
It is not a complicated system but it does require some practice. It produces easily identifiable signals, but it is important that the trader respects the stop loss as well as the take profit levels.
This system was developed to trade on long-term time frames, making it more suitable for traders with a higher level of patience. As with any strategy, we recommend evaluating it on a demo account before risking real money.

System set up

• Time Frame: Daily (can be tested on 4H time frames, but not recommended on shorter time frames).
• 1 candlestick/bar chart.
• Trading instruments: Forex (all currency pairs), but you can try other instruments.
• Indicator 1: EMA of 365 periods to indicate the direction of the market.
• Indicator 2: Zigzag to determine stop loss levels. The default setting is recommended.
• Indicator 3: LukeB Forex with Arrow Alert (Custom Indicator).
  You can download the Forex LukeB indicator at the following link:
  

- LukeB Forex Custom Indicator
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System rules

As we will see, the trading system has simple rules. In my opinion the most complicated thing is that it is designed for daily charts and many traders do not have the patience to trade on such long time frames. Entry signals (buy and sell) are indicated by green and red arrows that appear on the chart. These arrows correspond to the signals generated by the LukeB Forex indicator.

1. If the price action is above the 365 EMA only the green arrows (buy signals) should be considered.
2. If the price action is below the 365 EMA only the red arrows (sell signals) should be considered.
3. For the stop loss, the Zigzag is used in the following way:

• Buy positions: Stop loss is placed at the last low of the Zigzag indicator.
• Sell ​​positions: Stop loss is placed at the last high of the Zigzag indicator.
• Sometimes the same EMA can also be used as a stop loss.

Take profit level
This depends on each trader. Depending on the risk tolerance of each trade, the following practices can be applied to close winning positions:

• Half of the stop loss.
• Same number of pips as the stop loss.
• 1.5 times the number of pips of the stop loss.
• Close the position at a major Fibonacci level or resistance/support.

Money management

• You should not risk more than 2% of the account capital in a single operation. However, each trader can apply their own money management strategy.

How it work

The following image shows several examples of bullish and bearish signals generated by this system, which are indicated by red arrows (sell signals) and green arrows (buy signals). In this case, the system was used on a daily chart of the EUUSD. At first glance, several of those signals generated trades that produced a good number of pips of profit.

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Stochastic Oscillator Based Trading Technique

This is a very interesting trading technique which, according to its creator, has a fairly high success rate, which of course you have to try first on a demo account. Basically, through this strategy, we seek to enter the pullbacks, which in turn serves to guarantee safer stop-loss levels and in the event that the operation does not go in our favor, the loss will be more limited.
Among the advantages of this strategy is that it is quite simple, and only one technical indicator is used, which facilitates its execution. Likewise, as mentioned above, it uses quite safe stop loss levels. The only but of this system is that the take profit (levels for taking profit) must be optimized.
To use this strategy, the following conditions are required:

• It can be used on all currency pairs.
• It can be used in all time frames, however it is not recommended to use it in long periods of time.
• The only indicator used is the stochastic oscillator (14, 7, 7), using the simple MM method. For those who are not familiar with the use of stochastics, these numbers indicate that you should set the %K to 14, the %D period to 7 and the deceleration to 7.

https://preview.redd.it/zl7rzgjghhm91.png?width=497&format=png&auto=webp&s=49016cbe60e438f7e9a070fbf66513b4857f5999

Stochastic oscillator based trading system example

Entry Rules

• You should enter buying when the cyan (blue) line crosses the red line from below, both lines being located in the lower half of the indicator window, where the stochastic is displayed.
• Rather, it is entered by selling where the cyan line crosses the red line from above, both being located in the upper half of the indicator window.

Exit rules

• If you are in a long position, the stop loss is placed at the local maximum (the maximum observed during that period).
• Conversely, if you are short, the stop is placed at the local low (the low observed during that period).
• If the trade develops favorably, take profit (or place a take profit order) when the price has moved a number of pips equal to 1 x Stop Loss or 1.5 x Stop Loss . In other words, our take profit must be at least once our stop loss.
• In the event of another entry signal (contrary to our position), we must logically close our position.

If you look at the chart above you can find 4 signals produced by this strategy. In this case, all stop losses are marked with yellow lines for easy identification. The first signal is a short entry with a fairly close stop loss so the potential loss is low.
We can see how the fall produced is significant and would have given rise to a good profit. In this case we should have exited once the opposite cross occurred in the stochastic.
The next signal is bullish but the market does not go up very strongly as it turned out to be a false pullback. Because the stop loss is quite tight, the loss would not have been much.
The third cross cannot be taken as a signal as it was a bearish cross that occurred in the lower half of the window where the indicator is placed. Here it is best to stay out of the market until a clearer signal occurs.
The next signal is clearly bullish, although with a further stop loss and take profit, which is why it is a more risky operation, of course, with great possibilities of working.
The last signal is for a short position, with a small stop loss but with the possibility of letting the profits run if you know how to handle the operation properly.
It is important to note that sometimes stochastic can produce false signals, as any trading strategy is not infallible. For this reason, stop loss and rules must always be respected.
As you can see, bullish crossovers in the upper half and bearish crossovers in the lower half can occur, but these are high risk signals so it is wise to avoid them.
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Bollinger bands trend following Strategy

Many traders experience tremendous difficulties when trading with the trend. This observation can backfire as most traders state that trend trading is their preferred approach to investing in the market; but after analyzing the records of thousands of traders, brokers are convinced otherwise.
Despite the well-known expression “the trend is our friend”, in reality most traders prefer to discover highs and lows and forget about the trend, which can be a serious mistake since a trend can present multiple opportunities.
This trading technique is based on the desire of most traders to find reversal points in price action (this means buying lows and selling highs), but doing this within the general framework of trading following the trend.
This strategy employs multiple time frames, moving averages, and Bollinger bands as its tools to generate the entries. Also, a 20-period simple moving average is used on a daily chart to determine the trend. In technical analysis, there are numerous tools that can help us find the trend, but none are as simple or as effective as the 20-period Simple Moving Average.
Although there are other series of moving averages that the trader can use, if we trade with daily charts, a 20-period moving average compresses an entire month of useful data (20 days in which the market is open), and as such gives us a pretty good idea of ​​an "average" price.
Therefore, if the price action is above the "middle" price, then we can assume that the currency pair (or any other instrument) is in an uptrend and vice versa: if the price action is below the “medium”, we can assume that the instrument is in a downtrend.
Next, we switch to hourly charts to identify entry points. In this case, we only trade in the direction of the trend buying under conditions where the price is oversold in an uptrend and selling under conditions where the price is overbought in a downtrend. How do we determine overbought and oversold extremes? The answer is through Bollinger bands which help us measure price action. This indicator measures price extremes by calculating the standard deviation of price from its 20-period moving average.
For the 1-hour charts, we use three standard deviation (3SD) Bollinger Bands and two standard deviation (2SD) Bollinger Bands to create a set of Bollinger Bands channels. When the price is trading in a trending channel.

Why do we use 2DE and 3DE configurations in this strategy?

This is because the Bollinger Bands rule applies to price action on a daily scale basis. In order to properly trade hourly charts, which are shorter timeframe and therefore more volatile, we need to accommodate those extremes in order to generate the most accurate trading signals possible.
In fact, a very useful rule that every trader should remember is that the value of the Bollinger bands should increase with each decrease in the time frame used. For example, with 5-minute charts, a trader can use Bollinger Bands with a setting of 3.5 standard deviations or even 4 standard deviations in order to focus only on conditions where there is the most over-buying and over-selling.
Continuing with the strategy, after establishing the direction of the trend, we now look at the price action on the hourly charts. If the price is in an uptrend on the daily chart, we analyze the 1 hour charts looking for points where the price will resume the trend.
If the price continues to move between the lower bands of the Bollinger bands with 2 DE and 3 DE setup, it is best to stay away from the market as this indicates strong bearish momentum.
The great advantage of this trading system is that it prevents us from having to prematurely guess when the movement we are looking for is going to occur since it forces the trader to wait for the price action to confirm a low or a low in the price movement.
In our example, if the closing price is trading above the lower 2 DE Bollinger band, we open a long position using the previous low of the move minus 5 pips as a stop loss. For its part, we place our first take profit target for the first unit at a point equal to half of the amount we are risking, and if it is reached, we move the stop loss to “breakeven” for the rest of the position.
For the second unit, we look for the price to rise and reach the upper Bollinger band, however, we close the position if the price of the instrument closes outside the channel of the 3DE and 2DE Bollinger bands, since this suggests that the uptrend may be about to end.

Rules for long positions

• On a daily chart, place a 20-period simple moving average and make sure the price is closing above the moving average.
• Only open buy positions following the direction of the trend.
• Now switch to 1 hour charts and place two sets of Bollinger Bands on the chart. The first pair of Bollinger bands should have a 3 standard deviation setting while the second one should have a 2 standard deviation setting.
• Once the price rises, crosses and closes above the lower channel of the Bollinger bands 3DE and 2DE on the 1 hour chart, open a buy position at market price, which we can divide into two units that we will gradually close
• Then place a stop loss at the minimum of the movement minus 5 points and calculate the risk (Risk = Entry Price – Stop Loss Price). Those traders who want to give the trade a little more room can place the stop about 10 points below the low of the move.
• Place a take profit target for the first unit at a point that corresponds to 50% risk. For example, if you are risking 40 points on a trade, then place a Take Profit limit order about 20 points above the entry.
• Once the price reaches the first take profit target, move the stop loss to the breakeven point (i.e. the entry point where there is no profit or loss).
• Close the second unit when the price closes below the upper channel of the 3DE and 2DE Bollinger bands or if the price drops to the new stop loss, whichever comes first.

Rules for short positions

• On a daily chart, place a 20-period simple moving average and make sure the price is closing below the moving average.
• Only open short positions following the direction of the trend.
• Now switch to 1 hour charts and place two sets of Bollinger Bands on the chart. The first pair of Bollinger bands should have a 3 standard deviation setting while the second one should have a 2 standard deviation setting.
• Once the price goes down, crosses and closes below the upper channel of the 3DE and 2DE Bollinger bands on the 1 hour chart, open a sell position at market price, which we can divide into two units that we will gradually close
• Then place a stop loss at the minimum of the movement minus 5 points and calculate the risk (Risk = Entry Price – Stop Loss Price). Those traders who want to give the trade a little more room can place the stop about 10 points below the low of the move.
• Place a take profit target for the first unit at a point that corresponds to 50% risk. For example, if you are risking 40 points on a trade, then place a Take Profit limit order about 20 points above the entry.
• Once the price reaches the first take profit target, move the stop loss to the breakeven point (i.e. the entry point where there is no profit or loss).
• Close the second unit when the price closes below the upper channel of the 3DE and 2DE Bollinger bands or if the price drops to the new stop loss, whichever comes first.

Strategy Example

https://preview.redd.it/x1wpezxwggp91.png?width=400&format=png&auto=webp&s=5d8c4e4f273fe3139f96665ff0dea1bec84f9334
Looking at the daily chart above for EUCHF, we can see that in mid-March of that year the price was trading above its 20-period simple moving average, indicating that it is in a clear uptrend.
https://preview.redd.it/d0oyulwxggp91.png?width=400&format=png&auto=webp&s=490e0f3ece8e667031ac5d644f07749f5907bbda
Now, on the 1 hour chart, we wait for the EUCHF to break above the lower channel of the 3DE and 2DE Bollinger bands as indicated by the yellow circle in the image above. Once this breakout occurs, a buy position is opened on March 15 at 6pm EST at a price of 1.56235 with a stop loss at 1.5623, on which we risk about 12 pips (It should be noted that the EUCHF is a pair that generally has low volatility which allows us to trade with a low level of risk compared to other instruments.
Because the risk is so low we can place the take profit target at a lower level. equivalent to 100% of the risk instead of 50% of the usual risk).
Continuing with the example and regardless of the decision that may have been made, at precisely 3am EST on March 16, the first unit of the position can be closed when the price reaches the first take profit target at 1.5651, which which gives us a benefit of 16 pips.
We then move the stop loss to the breakeven point (the market entry point) for the remainder of the position and place the next take profit level in the upper Bollinger bands area. We wait for the price to break through the Upper Inner Bollinger Band (enter the 3DE-2DE Upper Bollinger Bands channel) and move for some time in that area in order to check whether it will continue to rise or vice versa.
It will fall at any moment in the direction of the moving average.
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Antonov Trading Strategy: What is the Antonov Method?

This trading strategy was created by the Russian forex trader Vladislav Antonov and is basically a fairly simple method designed as an improvement on another very famous method known as Vegas (which we will talk about later). For this, it seeks to introduce what is known as a percentage envelope instead of pips. Basically what this strategy does is use a tunnel of averages on a 1-hour Forex chart.
To produce this tunnel, it is necessary to take a moving average of 55 periods and the envelopes of this average are calculated at 0.38%, 0.62% and 1.62%, with which the tunnel is already obtained. Antonov refers to the lines obtained above the mean as U1 , U2 , U3 and U4 while for those that are below the mean he uses the following names: D1 , D2 , D3 and D4 . Finally, the simple moving average of 55 periods is called Line Balance or LB.
The trader also has the option of displaying the following indicators on the chart to serve as confirmation or reference:
Delimitation of the most important sessions by colors:

• North American session: 14:00 to 23:00 CET.
• European Session: 8:00 a.m. to 5:00 p.m. CET.
• Asian session: 0:00 a.m. to 11:00 a.m. CET.

1. High and low of the current session.
2. OSMA with a period of 26, 12, 9: This indicator is present in Metatrader 4 and what it does is calculate the difference between the MACD and its moving average. This difference is drawn in the form of a histogram and serves as a way for the trader to confirm the direction of a trend.

The final configuration of the chart with all the elements described above is as follows: In this case we can see that the different market sessions are shaded as follows (I clarify this so that there are no doubts with the example):Antonov trading technique
https://preview.redd.it/3f2fs7lsq7l91.png?width=320&format=png&auto=webp&s=943b6c3077f3be070dc05e3099634b4901b9d0b2

• American Session: Shaded pink and intersects with the European session (grey shaded area).
• European Session: It is the area that does not have any coloration.
• Asian Session: Shaded blue, intersects with the European session (darkest shaded area).

Once we have the chart configured with these indicators ready, we are going to apply the following rules defined by Antonov himself:

1. The LB line is used as the reference line to which the price tends to return. If we see that the candles make contact with said line, we must be ready for a strong deviation from that moving average, either in one direction or the other.
2. Generally, the price moves in the channel formed by the U1 and D1 lines , which usually occurs before a strong increase in market volatility occurs, for example, moments before an important economic data is released. . This situation usually occurs especially if the LB average has a flat slope, that is, in a market with no clear trend.
3. Normally, when the volatility in the market increases, the price will tend to reach the U3 line , in case the movement is upwards, or the D3 line , if the movement is downwards.
4. A normal pattern is one in which the price quickly reaches the U2 line if the market is bullish or the D2 line if the market is bearish and then corrects towards the U1 line (bullish market) or the D1 line (bearish market) and from there. from that line get to bounce. If this happens, the price will most likely reach the U3 level in a bull market or D3 in a bear market.
5. Finally, the band that is between the third and fourth lines, that is, U3 to U4 or D3 to D4, is almost never reached by the price unless some data with a strong impact on the market has been released, such as be some important figure related to employment in the United States for example, especially in times of economic recession.

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Renko THV Trading Strategy

This trading strategy was developed based on the THV system and therefore uses a series of custom indicators for Metatrader 4 which are included at the end of the article. This system uses Renko bars and is based primarily on price action and does not take the time factor as much into account.
The best results are produced with box sizes of 5 pips and 13 pips. Of course the trader can test the system with different box sizes.
As always it is recommended to evaluate this system with a demo account before risking real money.
After installing the custom indicators and the template we will get an image like the following:
https://preview.redd.it/putrcu7596r91.png?width=450&format=png&auto=webp&s=8330e7293174d5ee76b21ba44d1e7e7029e499c0
Example of a RENKO trading system template

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System indicators with Renko charts

If the RenkopThv template is used, we will see the following indicators:

• Renko candelas
• Candles Heiken Ash
• Ichimoku Kinko Hyo
• Coral 55
• OsMACD 13 (OsMA and MACD combined in one indicator).
• Money Flow Index 13.
• FIM 13 (Momentum and Force Index combined in a single indicator).
• CCI 13.
• TRIX.
• T3 13: It is an indicator that shows when the fast line of the Trix indicator crosses the zero line.
• An indicator that shows when the market is trendless.
• Indicator with important market news. Entering the market 15 minutes before or 15 minutes after an announcement is not recommended.

The Heiken Ashi is used to more easily determine the direction of price action.
The other templates in the system have the same indicators shown above, what changes is the way they are organized. In my case, the Renko THV template was the most convenient. Through the following link you can download this template for Metatrader 4:
-RENKO trading system template and indicators

Renko THV system rules

Long positions
A buy position is opened when the following conditions occur:

• The renko chart turns blue.
• The price is above the Coral indicator.
• The price is above the cloud of the Ichimoku Kinko Hyu indicator.
• All indicator blocks turn blue for the first time.
• The price action on the M2 chart is above the Coral indicator and trending up.
• The price action is not close to any major resistance or support.
• There should be no major market news in the next 15 minutes.

Buy position example
Example of buy position with RENKO system
Short positions
A short position is opened when the following conditions occur:

• The renko chart turns red.
• The price is below the Coral indicator.
• The price is below the cloud of the Ichimoku Kinko Hyu indicator.
• All indicator blocks turn red for the first time.
• The price action on the M2 chart is below the Coral indicator and trending down.
• The price action is not close to any major resistance or support.
• There should be no major market news in the next 15 minutes.

Sell ​​Position Example
Example of sell position with RENKO strategy

Stop loss and take profit

With this system it is quite easy to determine the entry point, the most complicated thing is knowing when to close a position. In this case, a Take Profit level of 15 to 20 pips is recommended. Depending on the market conditions, sometimes the trader may try to make a profit of 50 pips.
The stop loss is applied based on the time frame that we are trading. A value of 35 to 50 pips can be used.
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