Strategies that are based on moving averages are considered very popular and in-demand among the newcomers of the foreign exchange market.
This is not surprising, since they combine in themselves both simplicity and profitability. Being effective, they allow the trader to achieve the desired results, even if he has just started his trading on Forex and has not yet had experience.
The strategy called Mask refers to the category of watch tactics and stands out among the rest with a high level of effectiveness.
It allows the player to better understand what is happening on the forex market and allows finding favorable points (points) for entering the market.
This strategy is based on some non-standard indicators and is also based on the well-known MA (moving averages).
This tactic can not be defined as a trend, but still, it should be noted that within the trend this strategy is characterized by stability.
Let us consider the Mask in more detail.
1. Requirements for work
Speaking about the essential properties of Masks, it is necessary to emphasize its main points:
- the value of the time interval should be equal to H1;
- optimal, if evaluated from the point of view of efficiency, instruments (currency pairs) - EUR / USD; GBP / USD;
- User indicators.
If we talk about custom indicators, then the order of adding these funds will be as follows:
- Heiken Ashi DM indicator is used to significantly reduce market noise, and also to easily identify trend directions;
-Traders Dynamic Index: provides an opportunity to assess the level of intensity of an already created trend;
- Chaikin's Volatility Kenzo. This tool assesses market volatility;
- Smoothed Moving Average: a classic indicator, determining the presence of a trend in the market.
2. Use of tactics in practice
After calculating all the necessary conditions and determining the tools used, you can start to implement the trading strategy Mask in practice.
When making a purchase, the expected set of strategy steps should be as follows:
- the indicator Heiken creates a shadow of a blue hue, which indicates that the market is rising;
- the Traders Dynamic Index line, which is represented by a green tint, is at the top concerning the red line and the middle level;
Chaikin's line is showing a boost;
The angles of the two MA lines are significantly increasing.
If all of the above points are present, then the trader should wait until the opening of a new bar and start buying.
It should also be taken into account that the maximum stop-loss level should not exceed the limit of 50 points, and the profit should be 2.5-3 times greater than the fixed size of the stop-loss.
If we talk about the sale, then for the deal such conditions will be relevant:
- Heiken Ashi DM forms a red shadow, whose hue indicates a downward direction of the market.
- Traders Dynamic Index, which is highlighted in green, is lower than the red line and the middle level;
- also demonstrates a significant increase in the line of the Chaikin Volatility Indicator;
- Moving averages are distinguished by a rather sharpened angle.
In case all the above conditions are implemented, then the trader should wait for the opening of a new bar (hour candle), and then start selling.
Using the Mask tactic is not a difficult approach to trading, therefore, if all the rules are observed, an effective result is ensured!
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