This trend following strategy consists of 3 trading indicators: ADMI, Macd-Dot and 200 SMA. I’ll be using the 200 SMA for overall trend direction, the ADMI to measure trend strength and to confirm the prevailing trend, and finally the MACD Dot indicator to enter a low risk trade in the overall trend direction.
Trading Tools/Settings
Indicators: Average Directional Movement Index, macd-dot, 200 Simple Moving Average
Time frame(s): 30 Min and above
Trading sessions: All
Currency pairs: All
Download
Download the ADMI Macd Trend Following System for Metatrader 4.
USD/JPY Daily Chart Example
Trading Rules
Long Entries:
Price above the 200 Simple Moving Average (bullish trend direction)
+DI above -DI (bullish trend confirmation)
ADX above 20 (bullish trend strength)
Blue MACD Dot (long entry signal)
Place stop-loss below the most recent swing low. Take profit just before key resistance levels or apply risk-to-reward ratio 1:1.5 or higher.
The USD/JPY chart above shows us 6 profitable buy signals along the uptrend.
Short Entries:
Price below the 200 Simple Moving Average (bearish trend direction)
-DI above +DI (bearish trend confirmation)
ADX above 20 (bearish trend strength)
Red MACD Dot (sell entry signal)
Place stop-loss above the most recent swing high. Take profit just before key support levels or apply risk-to-reward ratio 1:1.5 or higher.
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