Before diving into the world of forex trading it is wise to ask how traders make money from forex trading. So how do forex traders make money from forex trading Is not it?
Traders make trades based on the prices of submitted bids and offers. If you want to buy or sell at market prices, you must trade based on the prices posted on the market. If the price does not move, the trader will not make any profit at all. That said, we can say that traders profit from price movements and volatility.
The next question is why the price moves. Prices fluctuate due to various trades by traders around the world. If most traders are making buy trades, the market goes up. If most traders are making sell trades, the market will go down.
But a more important question is how to predict which direction the market is likely to move. If possible, the best way to predict where the price will move next is to know which direction most traders plan to trade. This is called market sentiment.
Market sentiment is basically the overall attitude of traders and investors towards a particular tradable security, commodity, or forex pair. Whether they are looking to buy or sell a particular tradable security, that is the overall sentiment of the market.
In a way, prices are driven by herd mentality. If a large portion of the market considers buying a security and acts on it, its price will rise. When most market participants act with the idea of selling a security, its price falls.
buzzer indicator
The Buzzer indicator is a custom trend following technical indicator that helps traders identify trend directional biases or trend reversals.
This simple indicator plots a line that mimics the movement of price action.
They are similar to moving averages, but differ from moving averages in that the movement is very jagged.
The line changes color to indicate the direction of momentum. Lime indicates bullish momentum and red indicates bearish momentum.
Traders can use the change in color of the line to help identify potential momentum reversal entry points.
buyer and seller
The Buyers vs Sellers indicator, also known as BvS, is a custom market sentiment indicator that is also part of the Oscillator family of indicators.
The BvS indicator plots histogram bars oscillating around zero. A positive bar indicates bullish market sentiment and a negative bar indicates bearish market sentiment. The bar color also changes based on the direction of market sentiment. Lime bars indicate bullish sentiment and red bars indicate bearish sentiment.
You can also change the indicator to not show negative bars by removing the “delta”. Doing so identifies market sentiment based solely on bar color.
It can also be modified as a binary market sentiment filter. In this mode the bar values are not reflected in the window. The bar will have uniform length. Market sentiment is still identified based on bar color.
trading strategy
While it is impossible to read the thoughts of thousands of traders around the world, it is possible to give an indication of market sentiment based on past price movements.
Buzzer Buyers vs Sellers Forex Day Trading Strategy is a trend reversal strategy confirmed by market sentiment.
Trend reversal signals are initially identified based on the crossing of the buzzer line above the 36-period Simple Moving Average (SMA) line. The color of the buzzer line should also indicate that short-term momentum is in line with the direction of the trend reversal.
The BvS histogram bars should then indicate that the direction of market sentiment is in line with the direction of the trend reversal. This is based on whether the bar is positive or negative and the color of the bar.
index:
- buzzer
- 36 SMAs
- BvS v3
- BvS Duration: 40
- Show Histogram: true
- Show diffs: true
Preferred timeframe: 5-minute, 15-minute, 30-minute, and 1-hour charts
Currency pair: Forex Major, Minor, Cross
Trading session: Sessions in Tokyo, London and New York
Trading setup
entry
- The buzzer line should exceed the 36 SMA line.
- The buzzer line should be lime.
- The BvS bar should be positive lime.
- Enter a buy order at the confluence of the above conditions.
stop loss
- Place a stop loss on the support below the entry candle.
Exit
- Close the trade as soon as the buzzer line breaks below the 36 SMA line.
sell trade settings
entry
- The buzzer line must cross below the 36 SMA line.
- The buzzer line will be red.
- The BvS bar will be positive red.
- Enter a sell order at the confluence of the above conditions.
stop loss
- Place a stop loss at the resistance above the entry candle.
Exit
- Close the trade as soon as the buzzer line crosses the 36 SMA line.
Conclusion
This trading strategy is a simple trend following strategy that combines a crossover strategy using custom technical indicators and simple moving averages with confirmation of market sentiment indicators.
Trading along the direction of market sentiment can prove to be very effective. This is because market sentiment tries to predict what the market thinks, and if it is put into action, the price should move in a certain direction.
Traders can practice with this type of strategy to get a feel for whether this type of strategy works for them.
Forex Trading Strategy Installation Instructions
Buzzer Buyers vs Sellers Forex Day Trading Strategy is a combination of Metatrader 4 (MT4) indicator and template.
The essence of this forex strategy is to convert accumulated historical data and trading signals.
Buzzer Buyers vs Sellers Forex Day Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can anticipate further price movements and adjust this strategy accordingly.
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How to install Buzzer Buyers vs Sellers Forex Day Trading Strategy?
- Download Buzzer Buyers vs Sellers Forex Day Trading Strategy.zip
- Copy the *mq4 and ex4 files to the metatrader directory /experts/indicators/.
- Copy the tpl file (template) to the Metatrader directory /templates/.
- Start or restart your Metatrader client
- Choose a chart and timeframe to test your forex strategy
- Right click on the trading chart and hover over “Templates”
- Move right to select Buzzer Buyers vs Sellers Forex Day Trading Strategy
- You can see the Buzzer Buyers vs Sellers Forex Day Trading Strategy available on the chart
*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with his MT4 indicator on the MetaTrader platform.
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