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Master Point: The power of the currency strength indicator – Analytics & Forecasts – 20 August 2022

Byadmin

Aug 20, 2022
Master Point: The power of the currency strength indicator


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In addition to the two main entry strategies, the Master Point indicator has one additional entry strategy based on the strength of the selected currency. The advantage of using this entry strategy is not only accurate entries, but also a good risk/reward ratio. As with these two strategies, there are certain rules that you must follow in order to pick good entries.

1) The first rule – the currency strength line should change its color (show a change in the currency strength balance)on the first 5-15 bars after a trend change.

Good entry: 
The currency strength indicator shows a signal after just one bar of a trend change.

Sometimes it’s okay if the signal from the currency strength indicator is 1-5 bars before a trend change.

Bad entry:
The indicator shows an entry signal after more than 15 bars passed after the trend change.

2) Risk/Reward ratio is important. The size of the stop-loss should be no bigger than the distance between the first support/resistance level and the entry price (R/R should be no less than 1:1). There are many opportunities when the R/R is 1:3 or more).

Overall the strategy shows good results on all 7 major currencies, and allows entries with great R/R.



Image and article originally from www.mql5.com. Read the original article here.