Power of Trading
Discover a profitable, easy-to-use trading strategy for scalpers based on linear regression candles and UTBot alerts. Use the 200 EMA to trade with the trend, and a zero-spread broker for maximum profit potential. Backtesting results show a win rate of 71% and a maximum drawdown of only 6%.
The “Awesome Indicator” Trading Strategy: A Comprehensive Guide
Introduction
If you’re a trader who is constantly on the lookout for profitable trading strategies, then you’ve come to the right place. In this article, we’ll be taking a closer look at a highly effective trading strategy that is based on two free indicators: Linear Regression Candles and UTLBOT Alerts.
With this strategy, you can potentially make a huge amount of money from the forex market without the need for any complicated strategies or expensive tools. So, let’s dive in and explore this strategy in more detail.
Getting Started with the Strategy
The first step in the trading strategy is to open the tradingview.com website and select the GBP/JPY currency pair. Then, set the time frame to the five-minute time frame.
It’s important to note that you can use this strategy in all time frames and that it’s profitable in all of them. However, for the purposes of this article, we’ll be focusing on the five-minute time frame.
Adding the Indicators to the Chart
The next step is to open the indicators tab and search for Linear Regression Candles. Add this indicator to the chart and open the settings by clicking on the input section. Change the signal smoothing to seven.
Next, head over to the style section and make the line a bit thicker. Then, click on “hide the normal candles” to only see the linear regression candles.
Add a second indicator to your chart. This time, search for UTLBOT Alerts by Quant Nomad. Change the key value to two and the ATR to eleven in the input tab. This indicator will be our entry confirmation. So, when it gives a buy signal, take a long trade, and when it gives a sell signal, take a short trade.
To avoid false signals and increase our chances of success, we need to add one more indicator to the chart. Go to the indicators menu and search for EMA. Apply the Exponential Moving Average to the chart and change the length to 200 in the indicator settings. Customize the line thickness as you like.
Understanding the Strategy’s Mechanics
Now that we have all the indicators set up on our chart, it’s time to understand how the strategy works. First of all, it’s important to only trade with the trend. This means that when the price is moving below the 200 EMA, we are allowed to take only short positions and ignore buy signals. When the price is moving above the 200 EMA, we are allowed to take only long positions and ignore sell signals.
Let’s take a look at some real-life examples to help explain this further. When the price is below the 200 EMA and we get a good sell signal, we can take a short position. We recommend doing a trailing stop loss so you can set your stop loss at the 200 EMA. Doing so means that if the price falls above the 200 EMA, you’re in a bullish trend, and then you can open your short position again.
On the other hand, if the price is above the 200 EMA and we get a good buy signal, we can take a long position. Again, doing a trailing stop loss would be beneficial to protect your profits.
Backtesting the Strategy
After understanding how the strategy works, it’s time to test it to see if it actually works. Backtesting is a great way to do this. In this article, we backtested the strategy 100 times, starting with an initial account size of $1,000. For each trade, we risked 4% of our account size.
The results were excellent. The win rate for the strategy was 71%, which is very good for a five-minute scalping strategy. After taking 100 trades with the strategy, we increased our initial $1,000 account size by over 6,000%.
The strategy’s maximal drawdown was only 6%. This means that you stand to make a huge amount of profit with this strategy.
Conclusion
In conclusion, the “Awesome Indicator” trading strategy is a highly effective and profitable strategy that is easy to understand and implement. By using only two free indicators, you can potentially make a huge amount of money from the forex market.
Keep in mind that when using this indicator in the five-minute time frame, your stop loss will be very small. It’s essential to use a zero-spread broker to avoid any issues. We recommend joining the IC Market broker for this purpose.
If you have any questions or comments, please leave them in the comment section below. Finally, we hope that this article has helped you to understand this strategy and that you’ll give it a try. Good luck and happy trading!
