MAJOR UPDATE! PLEASE READ! Hey guys! Many traders are reversal traders who constantly look for market tops and bottoms, attempting to enter positions as early as possible; however, we know this is not as easy as it seems. Often, we encounter fake reversals or temporary pullbacks, leading us to chase and add to losing positions, which ultimately results in losses.
Now I'm sure most of us have heard the sayings that the "trend is your friend," "follow the trend," "trade with the trend," etc, so I gave this some serious thought and came up with an idea that I have been working on for a long time. I know that there are probably thousands of trend-based strategies, and perhaps mine is not unique, but it has been showing positive results with minimal time and effort. I created a strategy that is easy to follow and needs as little chart and screen time as possible (max 10 mins), kind of like a set-and-forget approach.
So here goes! The first thing you need is the new Candle Trend Catcher indicator; it's an updated and improved version of the original Trend indicator LuXingMod AUD indicator. It's a free indicator I found here on FF (thanks to LuXing); it simply shows all the pairs' candle direction for each time frame if it is green/up or red/down, simple. I've attached both versions to this thread, you can use either, however I suggest using the new one.
Now what are the entry criteria, and when do we open and close an order?
1. First we will edit the indicator settings to only show the H4, D1, W1, and MN bars/candles, as we are only looking at higher time frame trends.
2. When? On a Monday night, 1 hour before the first daily candle of the week closes, we will look for any pairs where there is a confluence between the trends on all 4 time frames.
3. For any pairs that have the same confluence on all 4 time frames, we will open an order in the same direction.
4. I normally wait for the first daily candle to be pretty much fully formed, so more or less 1 hour before the Monday daily close.
5. When do we take profit? You take profit when you are happy with it, or you can set your own TP in pips or %. I have set a 5% TP.
6. What about a stop loss? Well, this is a personal preference, but I'm setting a max of 10%, so if my account goes to -10% of my account equity, I'll close up for the week.
7. Can we set a trailing stop to trail profits? Sure, that would be a good idea after reaching your TP.
8. This whole process should take you a max of 10 mins to look for valid pairs and place your orders.
9. Anything else? No, that's it, simple, right?
This is a really easy strategy, guys; there is not much in it. We are simply following the overall main trend of the market. This is a weekly basket-style approach where we will hold orders for 2-4 days depending on the market. This strategy does not take into account fundamentals or high-impact news events, so if you want to be extra cautious, you can exclude any valid pairs that might be affected by related news events for the week.
It's been 7 years since first creating this thread, and a lot has changed since then. I have now also created a daily approach that trades daily the London session, and it's been pretty successful. So you have 2 options for trading this strategy, the original weekly basket approach or the daily basket approach; both work fine. I'll share my set file for the daily basket approach, which you can use or edit to your liking.
Many of my followers know that I'm a fan of EAs, and I think that they can be great tools if used correctly, so I made an EA based on this strategy. The EA is pretty straightforward, I think, and it should be easy enough to understand. The EA is also pretty customizable, so you can also trade it on other sessions and time frames; you only need to configure the settings accordingly. I recently made some major updates to the EA, adding additional trend filters like MA, HMA, and ATR, which you can use if you like or not, updated its logic, and cleaned up the code in general to make it lighter and more efficient.
I have set an expiry date to 31/12/2026. This is to protect the EA from being sold or commercialized, etc.
Due to some members' comments, I felt the need to state publicly that the Follow the Candles EA is FREE and always will be! There is no hidden commercial agenda or plans to sell the EA at any time!
Please, guys, let's stay on topic and try not to deviate too much from the original strategy. I will not tolerate any arguing or keyboard warriors; those that can't participate in a respectful, friendly manner will be removed.
Green pips to you all! Cheers!
Truth is like poetry. And most people f*cking hate poetry.
