Three Ducks Trading Strategy: Simplicity
The Three Ducks strategy is rightly considered one of the best trading strategies based on the application of the moving average in market analysis and trading in the nem. Like most weekly trading system, it is used in the trend market.
In this trading system, price movement analysis is performed at three time intervals. These are timeframes of М5, Н1, and Н4, respectively. With this weekly trading system, it is possible to detect downward and upward movements in the market quite quickly and simply. Notably also, the pattern strategy uses just one mathematical myforex indicator. This is a simple moving average with period 60, which is in any Metatraider 4 trading terminal.
Three Ducks forex trading strategy Description
For example, we will consider what conditions should be phased out in order for us to have the right to open a sale deal under the Three Ducks strategy.
The first duck
First, we analyze the Н4 time interval. We need the current market price to be below our moving average of SMA 60. If so, proceed to the next step.
The second duck
At this stage of application of the forex trading strategy Three Ducks we analyze the hour schedule. Just as with the Н4 timeframe, the price must be below the moving average SMA 60 in order to be able to open a transaction in the village. In the case where the current price of a terminal-open trading instrument is higher, you should wait until it crosses our moving average from top to bottom. Only then do we move to the third step, where we will already decide to open a deal.
The third duck
When both previous conditions are met, we pay attention to the time frame of the М5. At this time interval it is necessary to wait for the moment at which the price movement schedule will cross our SMA-60 from top to bottom. This will be a signal to enter the market.
For a more reliable and confident entry by strategy, you can wait not only for the muving punch, but also for the update of the nearest local price minimum.
Where to set the stop in the Three Ducks pattern strategy?
You can use one of the following options to install the Forex Security Warrant:
With scalping, short-term trading, a stop loss can be set behind the nearest local maximum (when a short position is opened) on the frame Н1 or М5.
In medium-term trading, the stops should be set at the nearest local maximum of the Н4 schedule.
Fixed stop loss is allowed (say 50 points).
This forex trading strategy allows and welcomes the use of a trailer stop.
Where to lock in profits?
For taking profits from the market, there are also several options:
It is possible not to use the warrant teak profit, and the profit is recorded with the help of a trailer foot.
Capture profits by Fibonachi levels.
Exact value (e.g. 100 points).
Or profits can be picked up when reached, or updated at the cost of local extremes.
With confidence it was possible to say that the Three Ducks strategy is one of Forex 's best trading strategies based on muvings, it is very important to comply exactly with all its rules and enter the market strictly according to the system. This means that you enter the transaction if and only if the price on all designated timeframes is below the moving average SMA-60.
This strategy is best applied to key highly liquid currency instruments such as EUR/USD and GBP/USD. It gives the best result during trade in the European and American sessions.