Strength of Momentum is a forex trading system which consists of four technical indicators. All of the indicators are very simple and they will make your trades easier to execute. The Strength of Momentum is a straight forward trading system which gives you crystal clear trading signals. The Strength of Momentum system can be used to trade for short term as well as for the long term. If you are thinking to trade for short term you should see the each and every arrow that form in the main chart. But if you are thinking to trade for midterm you should look only for the swing reversal arrows.
Like any other trading systems, the indicator in the main chart works as a signal generator indicator while the indicators in the indicator window will help you to verify those signals. When you install Strength of Momentum system in your trading platform, your chart should look like this:
These arrows are very simple to understand. There are arrows of various colors. You don’t need to watch all of those arrows but you can only watch pink and yellow arrows. Pink and yellow arrows give false signals many times but you should filter them with the other indicators. And you should always trade in the direction of the trend.
CCI is a major indicator of this trading system. You should buy only when the CCI is in positive territory. Similarly, you should sell only when the CCI is in negative territory.
You should buy when the RSI is above 50 and sell when the RSI is below 50. There are two RSI of different periods but ways of using them are same.
Buying Conditions Using Strength of Momentum.
- Market should be up trending.
- A red arrow should appear below the market.
- CCI indicator should be in positive territory.
- Both the RSI indicator should be above the 50.
- Place your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when a pink arrow appears above the market.
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Selling Conditions Using Strength of Momentum.
- Market should be down trending.
- A pink arrow should appear above the market.
- CCI indicator should be in negative territory.
- Both the RSI indicator should be below the 50 level.
- Place your short position as soon as above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when a yellow arrow appears below the market.
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