A trader who chooses success in his work in the foreign exchange market is constantly busy with important things - he monitors and studies exchange rates, evaluates quotes, and also carefully analyzes important financial events, which allows him to fully penetrate deep into the financial sector and markets. But a beginner should also understand that not everyone can turn their fantasies into reality and become a real professional - an experienced market player who prefers rational and balanced trading tactics in their market operations, making deals, and entering the market. Fans of such analysis should pay special attention to the trading tactics called «Traffic Light», which is designed to implement such principles.
The traffic light strategy is a multi-currency trading approach in the forex market. For the most part, this is a trend trading system, which has an optimal time interval for the implementation of trading operations (H4 or D1). The use of lower timeframes implies an increase in the number of trading operations with a parallel build-up of imaginary signals. Based on such information, it is recommended to apply this strategy in fixed time intervals, which were initially incorporated into the tactics. To begin with, you need to install the following indicators (those tools without which the full-fledged operation of the system is impossible): -HMA modified; - Goldminer 2; - Trend Master; - CCI indicator; -RSI custom.
The highest efficiency is achieved at the moment when the work of all indicators coincides - the tools that take part in the implementation of the selected trading schemes function smoothly. The developers of the strategy are professionals, and its foundation is based on a system with an optimal level of balance, and the system also contains some signal parameters - indicators that are similar to oscillators (visually), as well as trend tools that perform the task of filtering.
So, the strategy is based on the following 4 whales: 1) HMA Color indicator consists of several straight lines - lines, one of which is red and the other is green. The meaning of this tool is to modify - change the moving lines, which is why their parameters can be changed - selected and adjusted to the desired format (up to optimal values), which will be the moving average level. The main task of this indicator is to filter trends: bullish trends are indicated in green, and bearish in red. 2) The Gpldminer indicator is located in the area of the main auxiliary window and is presented in the form of bars (red and green shades). With its help, the indicator periods are optimized and adjusted. In the «Traffic Light»system, Goldmine performs the function of filtering trends. In the case when the bar is located in the red area, you need to sell, if in the green - buy. 3) RSI Costume is characterized by reds, greens, and yellows. This tool is based on the standard RSI oscillator. Entering the settings menu will make it possible to work with periodization, as well as control the level gradation, which is responsible for the shade of the candles. 4) CCI - standard oscillators that all trading terminals have. In the tool options, you can adjust the fixing periods, and this tool performs the task of withdrawing to the appropriate positions, in the period when a touch of the zero levels occurs.
To effectively enter a buy position, you need: - HMA indicator was green; - Columns of Goldminer instruments have also been colored green; - RSI Costume was also green; - the CCI oscillator should also be located at a level that implies the crossing of the zero value in an upward trend with the indicated exit upward, or with a probable direction to this. To exclude the possibility of redrawing, it is advisable to exit when the bar is closed. An effective entry into a sale is best done under the following conditions: - HMA Color lines with Goldminer lines and RSI columns must be red; - CCI indicators must touch the downward line of the field, or be close to such an intersection.
As for protective orders, stop losses must be present: the order must be placed on a line that is located below the minimum values of the signal bar when buying, and above the minimum indicators when selling. Among the minuses, I would like to highlight the property of the indicator to redraw, and from the pluses - clear entry and exit points.