Strategy Quiet river
How often we look for something complex that we believe may be the very long-awaited Grail and neglect simple but effective techniques. The Calm River strategy is based on two moving averages - which is easier. However, the indicators are not used in a standard manner and show good results. The goals are small but correct and are practiced with high probability.
Features of the Calm River Strategy
Most moving average based systems use their intersection as a signal to enter the deal. Such a signal is late and often turns out to be false. The Calm River strategy has its own feature - uses indicators in a slightly different way. This highlight of the trade strategy allows the use of signals from indicators almost without delay. The moving averages at us serve only as guides, and the main signal is supplied by the price, which cannot lag. However, the Calm River strategy works only in the trend market.
Both muwings must be clearly co-directed to one side, be as parallel as possible, have smooth shapes and resemble the river bed (hence the name). That is, the Calm River Muwings strategy uses as indicators of "calm," with which the price should interact in a special way. The signal to the entrance for us will be the rebound of the price from the mooving, provided that the latter maintains the trending position.
Quiet River Strategy Description
The advantage of the Calm River strategy is that you can trade on it on all currency pairs without exception: on majors, crosshairs, as well as shares and other trading instruments. The strategy is traded inside the day, the optimal time frame is М5. This does not mean that you cannot use system principles on other timeframes.
You can test Calm River 's work on your own at senior intervals to make a big profit. Try to optimize the muvings to get the best result - all this can and should be done. In this case, the strategy is tested at the М5 interval during the European and American sessions. You can take advantage of the finished result and apply the strategy according to the proposed rules.
The figure below shows examples of trending and fleeting markets on the TF М5 euro/dollar currency pair.
Calm River Strategy Trade
We use exponential moving averages with periods of 20 and 50. We wait for the price and the muvings to go parallel to each other in the same direction. Here, for the upward trend line, the price must be higher than the sliding price, and the MA 50 is lower than the MA 20. For the downward trend, the opposite is true: the price is lower, above it МА20, above МА50. So we determine the presence of a trend and wait for the necessary signal.
It comes on a pullback when the price enters the river 's "channel" and finds itself between the two muvings. It is important that the price does not "swim in the river" for a long time, according to the strategy no more than three Japanese candles are allowed with closure between muvings. If there are more closures, the price is stuck inside, then the entrance is missed, even if everything speaks for the fact that the price will go further on the trend. The figure below shows just this case.
In the green rectangle, the price "stuck" and showed five closures inside and above the mooving, so all this small flute we just miss. But in the event of a surge in volatility immediately after the green sector, we can enter as soon as the descending candle crossed in the opposite direction both muwings. Here the rule of three closures is formally observed. We 'd be at the close of the fourth candle.
Mani Management and Transaction Management
When we enter the deal on the "Calm River" trading system, we open two warrants with the same lot volume. The latter is calculated taking into account permissible losses of 1-2% per transaction. A restrictive stop loss is put for an extremum that is behind or between muvings. Taik is only put for one warrant and it is equal to the size of the stop loss. The second warrant is put in break-even at the first opportunity, then we move stop for the following extremes as they appear before closing back.
Examples of strategy deals
The figure below shows an example of entering the Calm River strategy deal to buy on a pair of euros/dollar.
We wait for a "river" of two muwings to appear, pointing up. Then the price is rolled back and one candle enters the "channel," but does not close in the nem. The next white candle closed outside the muvings, so on its closure we can open two purchase warrants at the price of 1.1698. Stop loss put below extremum at the price of 1.1692 (one point below). Thus, the teak profit at us will be equal to 6 points plus spread, that is 8-9 points for most brokers. One warrant at us closes on TP, on the second we could earn more than 30 points. In the future, the price would give us another opportunity to make a small profit.
"Calm River" is a simple and reliable scalping strategy that gives several signals a day on all instruments where there is a trend. There are also loss-making deals in it, but one good trend will give an opportunity to block all losses that arose earlier.