Option 1: Bollinger Bands + Keltner Channel + Momentum Oscillator

This combination is used by John F. Carter in his book Mastering The Trade. Also known as the Bollinger Squeeze system.

This is a trend-trading system used to capture large movements in the market after a period of silence.

Install 3 indicators as follows:
  • Bollinger Bands (BB) (20, 2.0)
  • Keltner Channel (20, 1.5)
  • Momentum Oscillator (12, close)
Entry conditions

  • Step 1: Wait for BB to move inside the upper and lower bands of the Keltner Channel.
  • Step 2: Then wait for BB to move out of the Keltner Channel.
  • Step 3: If the Momentum indicator is above 0, open a long position when that candle closes. If it falls below 0, open a short position when that candle closes.
  • Step 4: Exit the order when the Momentum indicator shows weakness.
That is, if you are buying, exit when Momentum is below 0, if you are selling, exit when Momentum is above 0.

Below is an example of the H4 bracket EURUSD pair:


The first arrow shows that BB moves inside the Keltner vane, a moment later BB moves out with a long candle closing above both indicators.

At the same time, Momentum is above 0 so this is a buy signal. A few candles later, Momentum moved below zero, at which point we exit.

It can be seen that this combination makes it possible for the trader to catch big moves in the market when the momentum increases.

Option 2: Donchian Channel + ATR

This is a combination of trend trading. The Donchian channel shows the moment when traders begin to focus on trading. And ATR helps traders to identify stop loss.

Indicator settings:
  • Donchian Channel (20)
  • ATR (14)
Order entry principles:
  • Step 1: If the market breaks above the upper channel, this is a buy signal. If the market breaks below the lower channel, this is a sell signal.
  • Step 2: Set Trailing Stop at 3ATR when each candle closes. There will be no take profit points.
(Note: The stop loss should be set manually, not using tools available on MT4).

Check out the chart below:


On the left side of the chart, we have our first sell entry point when the price breaks below the channel. Then we set our stop loss at 3ATR.

When the market goes down, we move our stop loss to follow. On the right side of the chart, the stop loss has been hit.

Note, this strategy does not work well in a sideways or trend unknown market.

Option 3: EMA + Stochastic

The special feature of this combination is that it can trade on the trend, and can also trade against the trend. Specifically, it is a pullback or a reversal in combination with a normal and hidden divergence.

Indicator settings:
  • 20 EMA
  • 50 EMA
  • Stochastic (10,3,3)
Pullback trading

Conditions for entering buy orders (sell orders on the contrary):
  • Step 1: If the 20 EMA is above the 50 EMA, we should watch buy. Note that the market needs to be in a bullish structure.
  • Step 2: Wait for the market to decline and a candle closes below the 20 EMA.
  • Step 3: If there is a hidden divergence on the Stochastic, wait for the market to close above the 20 EMA.
  • Step 4: Buy at the close of the candle above the 20 EMA.
  • Step 5: Place your stop loss below the nearby bottom and take profit at 1.5R or 2R.
Like the example below:


In the chart above, the market is making a higher high and the 20 EMA is above the 50 EMA. Now we can watch.

The market turned back to the EMA and closed below both the 20 EMA and the 50 EMA. Now Stochastic shows hidden divergence, the market then broke above the 20 EMA and closed above it. And this is the moment when we execute the buy order.

Trading reversal

Conditions for entering buy orders (sell orders on the contrary):
  • Step 1: Price is below both EMAs with the 20 EMA below the 50 EMA.
  • Step 2: Find a pattern of 2 bottom or lower bottom.
  • Step 3: Check if the stochastic shows divergence signals or not.
  • Step 4: If there is a divergence, buy when the market closes above the 20 EMA.
  • Step 5: Place your stop loss below the nearest bottom and take profit at 1.5R or 2R.
Like the example below:


On the left side of the chart above, you can see that the market is in a downtrend and the 20 EMA is below the 50 EMA.

The market then formed a lower low, but the Stochastic formed a higher low. Shows a divergence. When the market closes above the 20 EMA, we will buy.

Those are 3 ways to combine technical indicators, please refer.

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