This forex-tactic of the currency market assumes the conduct of trade within the interval, the duration of which is four hours.
You can give preference to almost any pair of currencies (as a trading tool), and the leading working signal is the known moving average, which has 25 periods.
Preferably, use it to the closing price.
In the process of trading, as a rule, pending orders participate - buy stop and sell stop orders.
Before entering the market phase (zone), we need to discover the last closed candle (bar) that crosses the MA.
A closed bar means a candle that has a constant closing price, setting the order for the purchase will be made higher than one point of the highest point of the closed candle that touches and intersects with the moving average (the direction from the bottom to the top) if the price closes higher than this limit.
The order for sale will be located lower than the smallest point of the closed candle by one point when the intersection with the moving occurs.
The main condition: the price indicator is closed under this position.
The stop-order can be set on a higher level than the maximum or vice versa below the minimum value, but the distance of 30 pips must be sustained (distance from the current indicator for the price).
The established orders should be viewed within 4 hours: in case the time interval has dried up and the position is still open and not exhibited in the profitable zone, we are obliged to move the safety stop to the zone of extreme value, towards the completed candle of the new 4-hour timeframe.
If we already have earnings, which is 50 points, and the first bar is over, then we need to translate this value into a trailing stop, thus changing the current position.
Characteristic features of trade tactics «Balance Line»
In the framework of this strategy, we have one important nuance, which should pay attention to stock exchange players.
The meaning of the supplement is that if the price oversteps MA, and thereafter it closes, pending orders can not be placed at a large distance.
This is due to a fairly high probability of a local minimum and maximum permutation and subsequent correction (rollback).
In this case, the trader needs to wait until the wave is formed and then go to the market.
As obvious from the title, tactics are closely related to the line balance, as with a signal tool.
The signal indicator is the fifth dimension of the market, the meaning of the trade in this technique is to have time to conclude a deal until the fractal has arisen.
The balance line is a straight line on which the price could be located, if we did not receive new data influencing the market situation.
You can analyze market events based on the remoteness of the price value from the balance line.
Also, the instrument in question indicates a trend of minimal resistance in the market zone.
About alerts for purchase or sale, we have the following situation.
If the stock exchange is in the purchase zone - higher than the specified limits, then the trading signals will consist in:
- the information should be read from right to left;
- monitor the minimum and maximum when buying currency;
- evaluate the base bar (candle) as a starting point;
- after the occurrence, analyze the current candle, and discover a new maximum value for entering the trading zone.
At a time when the exchange is in the sales area (under the balance line), we are based on such key points:
- the data is analyzed from right to left;
- we observe the minimum points to obtain a signal;
- determine the base candle and the minimum level for the entrance.