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This strategy is probably the clearest trading strategy on the market. You receive clear rules for both entry and exit signals as well as Trade Management. With this trading strategy you can successfully trade any liquid futures market, as well as CFDs and Forex. This trading strategy was developed in 2006 and has been traded successfully in the markets, without any changes ever being made to indicators or settings. The markets change, the strategy self-adapts. This is due to the exclusion of "artificial" components that are trying to "impose" something on the market. The chart, based on a tick chart, forms the basis of this strategy (for futures trading), or the range bars (for trading in futures, CFDs and Forex). This will completely remove the artificial component of time (eg. time frames such as 5min, 10min, 15min, etc.)
We use the MACD Zero Cross, specially programmed for NanoTrader, to recognize the markets’ current trend: are we in an uptrend, downtrend or in a sideways phase? Through a colored marking on the chart, the market trend is clearly highlighted. So you can focus on the chart and see the trend of the market immediately.
The above example shows an upward trend (green chart background), followed by a sideways phase (grey chart background) und finally a downward trend The Bollinger bands give us precise entry points within a trend. Only if the trend, which is based on the MACD, is supported by the Bollinger Bands, we want to enter into a position.(red chart background).
In each trade, we make use of a fixed stop loss as well as a pre-defined profit target. Both these points are calculated based on the average daily range (ADR) and are re-calculated on a daily basis. In less volatile market phases, we can trade using closer stops. In volatile market conditions we can work with profit targets that are placed further away.
Calculating clearly defined profit targets and pre-defined stop losses based on the ADR provides us with consistency in our trading results. Our goal is not looking for that "one large" winning trade, but rather attempting to continuously attain positive results.
A good trade management secures profits that have already been made and simultaneously reduces the risk in a trade.
Ideally, you trade the strategy in the morning between 9:00 until 11:00 and/or in the afternoon, during the US market opening between 15:30 until 17:00. In the morning, you can trade the DAX, Bund, EuroStoxx and the EuroFX / EURUSD; in the afternoon Crude Oil, Gold, the EuroFX / EURUSD as well as several e-minis (S&P, Dow, Nasdaq, Russel…).
In the above example from 30th June 2015, we see that at 9:00 the EuroFX is in a neutral market phase. At 9:30, a possible uptrend appears (green chart background, based on the MACD).
However, this trend does not get confirmed by the Bollinger bands, meaning no trade is taken. After a sideways move (white background) a possible downtrend appears at 9:45 (red background).
But this trend also fails to get the necessary confirmation from the Bollinger bands and consequently, no entry signal is given. After a further neutral phase we get another short trend. This time, the Bollinger bands do give a confirmation and a short entry is made.
After a short while, the trade can be protected by moving the stop loss to break-even level. Only a few minutes later, we reach our profit target.
For this, please contact Tobias Heitkötter by going to his website www.whitelinktrading.ch
If you are not yet familiar with the NanoTrader Full platform, please visit the quick start page.
Step 1: Firstly, activate the strategy. Right-click on the instrument you wish to trade and select the relevant strategy.
The chart has already been set to the correct tick or range aggregation. We suggest not changing this.
Step 2: Open an ADR chart for the same instrument in order to obtain the values for the profit target and stop loss (see Step 1).
Alternatively, you can use the predefined Scanner table.
In the WorkspaceBar, open the Scanner menu and right-click the Scanner called "Whitelink Plus ADR Template" and click on "Open", which will open the empty Scanner table.
From the WorkspaceBar, you can now drag and drop the instruments to be scanned into the table. Subsequently, right-click the symbol and open the corresponding ADR study:
The columns "Numeric 1" and "Numeric 2" now automatically calculate the stop loss and profit target. You now need to copy these values in the main study for both the Click Stop and Click Target.
Step 3: Configure the TradeManager. The TradeManager will automatically notify you (per MessageBox, Sound or Email), as soon as the risk has been secured or the middle Bollinger band has reached the entry price. To activate the TradeManager, the correct price for the Click Stop needs to be set and the alarm that you wish to use switched to "Yes".
Step 4: Activate the TradeGuard. The TradeGuard will automatically place the stop and take profit orders, after a position is opened. As soon as one of these orders is filled, the remaining orders are cancelled automatically.