High Low Step Trend Retracement Forex Trading Strategy – MT5

Trend following strategies are some the easiest types of trading strategies in order to consistently make money from the forex market. Trade direction is easy to identify. As long as you could identify the trend, then you would know which direction to take. Trades tend to have a higher win probability because you are practically trading in the direction of the trend. Trade setups and patterns are easy to identify and makes sense if you are used to them.
When trading trend following strategies, the first question you should answer would be whether you would want trade on retracements or breakouts. Breakouts are viable ways to trade a trend following setup. These breakouts are typically found during flat market congestion phases that occur during a trend or as a breakout from the swing high or swing low formed by the previous pulse. The advantage of a breakout is that it does tend to start with a strong momentum as breaks the minor support or resistance levels on a trend. Retracements on the other hand tend to have an advantage. This is because you are trading at a better price when you are entering a trade on a retracement. It is like asking for discount on your trade. The question is how to time your trade in a retracement.
Timing your trade in a retracement requires two things. A dynamic support or resistance level and a signal which confirms the end of the retracement. In this strategy, we would be looking at how we could make use of a custom trend following indicator as a dynamic support or resistance level, and the confluence of a small trendline breakout with the Stochastic Oscillator.
Hilo Escadinha Indicator
The Hilo Escadinha indicator is a custom technical indicator available for the MT5, which can be used for identifying trends.
This indicator plots a line on the price chart which has a staircase like pattern. It plots a blue line below price action whenever it detects a bullish trend bias, and a red line above price action whenever it detects a bearish trend bias.

This indicator behaves much like the Super Trend indicator. Its line shifts whenever price breaches and closes on the opposite side of the line. However, it has an advantage because it can be modified to allow it to move closer or farther from price action by adjusting the number of periods it covers. Because of this, the Hilo Escadinha indicator can also be used as a basis for dynamic support or resistance.
For the purpose of our trading strategy, we will be using this indicator as a trend direction filter and as a dynamic support or resistance level. We will trade only in the direction it indicates and we will trade whenever price retraces close to it.
Stochastic Oscillator
The Stochastic Oscillator (SO) is a very popular momentum-based technical indicator. This indicator is typically used to identify overbought and oversold market conditions. It could also be used to identify short-term momentum shifts which could be observed on smaller market pulses and oscillations.
The Stochastic Oscillator derives its computation from the most recent closing price while comparing it to the highest and lowest price levels during the preset time period.
It plots two lines in its own oscillator window. These lines oscillate within a bounded range of 0 to 100. Momentum direction is indicated by how the two lines interact. Momentum is bullish whenever the faster Stochastic Oscillator line is above the slower line, and bearish whenever the faster line is below the slower line.
The Stochastic Oscillator range also has markers at level 20 and 80. These markers indicate the overbought and oversold territory. The market is overbought whenever the Stochastic Oscillator lines are above 80, and oversold when the lines are below 20. Crossovers occurring beyond this range have a very high probability of resulting in a mean reversal.

In our strategy, we will be using the Stochastic Oscillator as a confirmation of the momentum shift back to the direction of the trend. This is because the Stochastic Oscillator tends to temporarily reverse against the trend whenever the market retraces. It then reverts back to the direction of the trend as soon as the retracement ends. Given that the Stochastic Oscillator has a default setting which is very responsive to price action movements, it is a great indicator to use a confirmation of our trade entry as it has less lag compared to other oscillators.
Bullish Hilo – Stochastic Oscillator Retracement Setup

Price Action should be above the Hilo Escadinha indicator.
The Hilo Escadinha indicator should be color blue.
Price Action should retrace towards the Hilo Escadinha line.
A minor resistance line should be identified as price retraces.
The fast Stochastic Oscillator line should close above the slow line.
Open a buy trade as soon as price breaks above the minor resistance line.
Set the stop loss on the support below the entry candle.
Close the trade as soon as price action shows signs of a possible bearish reversal.


Bearish Hilo – Stochastic Oscillator Retracement Setup

Price Action should be below the Hilo Escadinha indicator.
The Hilo Escadinha indicator should be color red.
Price Action should retrace towards the Hilo Escadinha line.
A minor support line should be identified as price retraces.
The fast Stochastic Oscillator line should close below the slow line.
Open a sell trade as soon as price breaks below the minor resistance line.
Set the stop loss on the resistance above the entry candle.
Close the trade as soon as price action shows signs of a possible bullish reversal.


Conclusion
One way to profitably trade from the forex market consistently is to look for a trending market and trade at the start of the pulses after the retracement.
This trading strategy simply gives us a system in order to objectively identify these setups with ease. Traders who can correctly identify these types of markets can easily make consistent gains for their trading accounts.

Forex Trading Strategies Installation Instructions
High Low Step Trend Retracement Forex Trading Strategy – MT5 is a combination of Metatrader 5 (MT5) indicator(s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
High Low Step Trend Retracement Forex Trading Strategy – MT5 provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install High Low Step Trend Retracement Forex Trading Strategy – MT5?

Download High Low Step Trend Retracement Forex Trading Strategy – MT5.zip
*Copy mq5 and ex5 files to your Metatrader Directory / experts / indicators /
Copy tpl file (Template) to your Metatrader Directory / templates /
Start or restart your Metatrader Client
Select Chart and Timeframe where you want to test your forex strategy
Right click on your trading chart and hover on “Template”
Move right to select High Low Step Trend Retracement Forex Trading Strategy – MT5
You will see High Low Step Trend Retracement Forex Trading Strategy – MT5 is available on your Chart

*Note: Not all forex strategies come with mq5/ex5 files. Some templates are already integrated with the MT5 Indicators from the MetaTrader Platform.
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La entrada High Low Step Trend Retracement Forex Trading Strategy – MT5 se publicó primero en Forex MT4 Indicators .

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