Many traders fear too much price volatility. But if you think about it, price fluctuations, also called volatility, is where traders make money. Without it, the trader has no chance of making a profit. Volatility is not something traders should avoid. Instead, they should be looking for it. What they should avoid is trading in highly unpredictable markets.
The Forex market is one of the most unpredictable tradable markets. This is because a tradable forex pair is a push and pull of supply and demand from two different currencies. This is not a one-sided push-pull like most tradable commodities.
For example, if you trade the USDJPY pair, the strength of the USD may be driving the pair higher. It could also be the Yen supply causing the price of the pair to rise. Conversely, a supply of US dollars could drive prices down, and a strong yen could drive prices down. Also, both currencies could be in a strong tug-of-war, or both could be weakening, which could lead to price chops. Many scenarios can play out in the forex market. The key to successful trading in the Forex market is understanding the seemingly unpredictable.
One of the most common reasons for price reversals is that forex pairs are overbought or oversold. This often brings prices back to average. Otherwise it is called mean reversal. Prices are often above average and extend to the opposite extreme. These situations present an opportunity for traders to profit if they can predict them.
winner oscillator
The Winner Oscillator is a custom technical indicator that helps traders predict momentum and short-term trends.
This indicator plots an oscillating bar between 0 and 100. Under normal market conditions, the bar will generally stay within the above ranges. However, if the market is overbought, the bar will overshoot above 100, and if the market is oversold, the bar will drop below 0.
A rising lime bar indicates a bullish momentum bias. A red bar moving down indicates a bearish momentum bias. A change in bar color indicates a potential momentum reversal.
Bullish reversals that occur immediately after the market is oversold tend to have a higher average bullish reversal probability. Bearish reversals that occur immediately after the market is overbought also tend to have higher average bearish reversal probabilities.
bollinger bands
The Bollinger Bands indicator is a unique technical indicator as it provides a complete picture of what the market is doing based on a single technical indicator. It provides indicators on volatility, trend, momentum, overbought or oversold market conditions.
Bollinger Bands is a channel-based technical indicator based on a simple moving average. Plot three lines called bands. The middle band is the Simple Moving Average (SMA), which is set to 20 periods by default. The outer bands are standard deviations from the middle band, usually set to +/- 2 standard deviations.
The central line of the Bollinger Bands, like most moving average lines, can be used to identify the trend direction based on the direction of its slope and the position of the price action relative to it. The trend is bullish when price action stays in the upper half of the Bollinger Bands and the 20 SMA line acts as a dynamic support line. Conversely, if price action stays in the lower half of the Bollinger Bands and respects the 20 SMA line as a dynamic resistance line, the trend is bearish.
Bollinger Bands can also be used to identify volatility. A widening Bollinger Band indicates an increase in market volatility and a narrowing Bollinger Band indicates a decrease in volatility.
The outer lines of the Bollinger Bands can indicate a possible mean reversal or momentum breakout. If the price breaks strongly outside the Bollinger Bands, it could indicate a strong momentum breakout. On the other hand, price action indicative of price refusal occurring in the region of the outer bands may indicate a potential mean reversal resulting from overbought or oversold price conditions.
trading strategy
The Winner Mean Reversal Forex Trading Strategy is a simple mean reversal strategy that utilizes price rejection patterns that occur at the outer Bollinger Band lines and are confirmed by the Winner Oscillator Bars.
The price should first show signs of price rejection at the outer lines of the Bollinger Bands indicated by a reversal candlestick pattern. This could be a simple pin bar pattern, a tangle pattern, etc.
The winning oscillator should check for overbought or oversold conditions based on the bars breaking out of range.
Trade setups are confirmed as soon as the winner’s oscillator bar shows signs of reversal.
index:
- bollinger bands
- Afl_winner
Preferred timeframe: 30 minute, 1 hour and 4 hour charts
Currency pair: Forex Major, Minor, Cross
Trading session: Sessions in Tokyo, London and New York
Trading setup
entry
- A bullish reversal candlestick pattern has formed, showing signs of price refusal in the area below the lower Bollinger band line.
- The winning bar should go below 0.
- Enter a buy order as soon as the lime winner bar is plotted.
stop loss
- Place a stop loss on the support below the entry candle.
Exit
- Close the trade as soon as the red winner bar is plotted.
sell trade settings
entry
- A bearish reversal candlestick pattern forms and shows signs of price refusal in the area above the Bollinger Bands line.
- The winning bar must be over 100.
- Enter a sell order as soon as the red winner bar is plotted.
stop loss
- Place a stop loss at the resistance above the entry candle.
Exit
- Close the trade as soon as the lime winner bar is plotted.
Conclusion
This simple trading strategy is a basic average reversal strategy that utilizes the Bollinger Bands price rejection.
Many profitable traders use price refusal patterns that occur in the outer bands of the Bollinger Bands as a means of trading in the forex market.
This strategy simply adds confirmation of the winner indicator which helps the trader to be more accurate when trading this type of strategy.
Forex Trading Strategy Installation Instructions
Winner Mean Reversal Forex 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.
Winner Mean Reversal Forex 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.
Recommended Forex MetaTrader 4 Trading Platform
- Free $50 To start trading immediately! (withdrawable profit)
- Deposit bonus up to $5,000
- Unlimited Loyalty Program
- Award Winning Forex Broker
- Additional Exclusive Bonus throughout the year
>> Claim your $50 bonus here <
Click here for a step-by-step XM broker account opening guide.
How to install Winner Mean Reversal Forex Trading Strategy?
- Download Winner Mean Reversal Forex 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 Winner Average Reversal Forex Trading Strategy
- You can see Winner Mean Reversal Forex 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.
Click below to download.
Get download access
