Strategies

Martingale Strategy with Awesome Oscillator

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The Martingale trading strategy for MT4 is the most beneficial trading system based on the Martingale concept with Awesome indicators. This trading method allows enhancement by permitting it to use in any forex pairs and time frames. Moreover, this strategy is straightforward, and traders can gain a modest profit from it from any level.

What is the Martingale strategy?

It is a method of putting resources into which the dollar estimation of investments constantly increments after losses or the trade size increments with the bringing down of portfolio size.

French mathematician Paul Pierre Levy presented the Martingale strategy in the eighteenth century. The methodology depends on the premise that just one great wager or trade is expected to turn your chances around. This method can be stood-out from the counter Martingale system, which includes splitting a bet every time there is a trade loss and multiplying it each time there is a benefit.

Key points

  • This strategy is a procedure to intensify the opportunity of recuperating from losing streaks.
  • This methodology includes multiplying up on losing bets and diminishing winning bets by partial.
  • This technique advances a misfortune opposed mindset that attempts to improve the chances of breaking even yet expands the odds of intense and rapid losses.

The Martingale strategy with Awesome Oscillator (AO)  for MT4

In this trading strategy, we will utilize multiple indicators to identify the price direction with higher accuracy. However, the FX market is full of doubt; that is why the only path to hold down in the market is to construct a trading strategy with higher accuracy utilizing various indicators.

Let’s have a look at trading indicators for this strategy with AO for MT4:

  • LWMA 7 periods close
  • Exponential moving average (EMA) 18 period, close
  • Simple moving average (SMA) 25 period close

Awesome Oscillator (AO)

The AO is a technical analysis tool made by an American trader Bill Williams as an instrument to decide if bullish or bearish strength rules the market. It gauges the market momentum with the mean to recognize potential bias direction or trend inversions.

The market momentum is assessed utilizing a blend of a more limited period and longer time frame, straightforward moving averages or ordered differently. It contemplates the ongoing momentum compared to a higher time frame momentum.

LWMA (Linear Weighted Moving Average)

The LWMA is a tremendous technical indicator that reacts quicker than the SMA to fresh prince improvements since its most recent readings are accentuated more than its more established ones. Notwithstanding, the LWMA isn’t as mainstream as the SMA and the EMA.

The LWMA was intended to counter the lagging issues related to the SMA along with these ways as the EMA.

EMA

It is a kind of moving average (MA) that puts a more prominent weight and importance on the latest data points. The EMA is additionally alluded to as the exponentially weighted moving average. An exponentially weighted moving average responds more importantly to current price changes than an SMA, which applies an equivalent weight to all perceptions in the period.

SMA 

It ascertains the average of a chosen range of prices, typically closing values, via the number of periods in that range. A simple MA is a technical indicator that can help decide whether an instrument price will sustain or on the off chance that it will switch a bull or bear trend.

EURO/USD chart

EURO/USD chart

Let’s have a look at the visual illustration of these components.

Bullish trading strategy

The Martingale trading strategy with AO is appropriate on all the time frames from five minutes to daily. One hour and four hours provide the ideal outcomes as it extracts the short-term dominance of the fundamental news.

However, you can choose any currency pairs, for instance:

  • GBP/USD
  • GBP/CAD
  • GBP/NZD
  • EUR/JPY
  • GBP/JPY
  • USD/JPY
  • EUR/USD
  • EUR/CAD
  • EUR/NZD

Bullish trading conditions

  • LWMA crosses the 18 EMA and 25 SMA upward
  • AO turns green and closes over zero levels
  • Execute the long position at the open of the next candle
EURO/USD chart

EURO/USD chart

Entry

After confirming all the trading conditions, you should wait for the candle to close and execute the trade as soon as the candles close.

Stop loss

As it is a trend riding strategy, the current trend is prospective to continue as long as the price trading over the most recent swing low. Therefore, put your stop loss below the recent swing low with a ten to 15 pips buffer.

Take profit 

When the LWMA crosses the EMA and SMA downward, it indicates that the price wants to make corrections. Therefore, you should exit the trade at that momentum to avoid unexpected market inversion.

Bearish trading strategy

The bearish trading strategy is also applicable on all timeframes from the 5 minutes to daily, where 1 hour and the 4 hour provides the ideal outcomes as it extracts the short term dominance of the fundamental news.

However, you can choose any currency pairs, for instance:

  • GBP/USD
  • GBP/CAD
  • GBP/NZD
  • EUR/JPY
  • GBP/JPY
  • USD/JPY
  • EUR/USD
  • EUR/CAD
  • EUR/NZD

Bearish trading condition

  • LWMA crosses downward the 18 EMA and 25 SMA
  • AO turns red and closes below zero levels
  • Execute the short position at the open of the next candle
    EURO/USD chart

    EURO/USD chart

    Entry

    After confirming all the trading conditions, you should wait for the candle to close and execute the short trade as soon as the candles close.

    Stop loss

    As it is a riding strategy, the current trend is prospective to continue as long as the price trades below the most recent swing high. Therefore, put your stop loss above the recent swing high with a ten to 15 pips buffer.

    Take profit

    When the LWMA crosses the EMA and SMA upward, it indicates that the price wants to make corrections. Therefore, you should exit the position at that momentum to avoid unexpected market inversion.

    Final thoughts

    This strategy with AO for MT4 is the most profitable trading system because it follows the Martingale investment method. It can provide you with a decent outcome every month. Moreover, you should utilize the proper Martingale money management system to better result from this trading strategy.

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