Green Fire Strategy - Basic RulesMonday, 6 November 2017 00:00
Green Fire Trading Strategy is one of the simplest systems for Forex trading, which is completely based on the technical indicators. It has a high percentage of profitable trades if you will follow the trading rules. At the same time, you must take into account that any trading system has unprofitable deals, and Green Fire is no exception.
Terms of Trade
The description of Green Fire appeared for the first time on the web forum. The author claimed that his brainchild should be used on the major currency pairs and some cross-pairs - the latter is better to test.
Trading should be carried on the H4 timeframe, but smaller periods can be used too. Practice shows that it’s not necessary to go below the hour time frame since there will be a lot of false signals.
As mentioned above, the system is fully based on indicators, so, first, you need to add the appropriate tools. The system works during the trend period, so there will be some proper robots.
To implement Green Fire, you need three non-standard and one standard indicator such as Heiken Ashi, EMA 12, EMA 3, or TrendLord.
Let's consider the indicators in more detail.
- Modified indicator Heiken_Ashi_Smoothed1lime. It is the main signal robot in this strategy. It forms smoothed Japanese candles. Application parameters should be as follows:
- MA in Color Applied Price (LWMA), which forms indications for 12 periods. This robot is more sensitive to price changes than a simple sliding one, and it also has a full-color gamut when the trend is reversed. Application parameters should be as follows:
- EMA 3 is the standard indicator for MT4.
- TrendLord generates its indications in the form of a histogram. It analyzes 21 periods.
When you install all these tools, the chart with the price will look like this:
How to Open the Positions?
The system is quite simple. Now consider how to open a short position.
First, you need to wait for the first white Heiken Ashi column - as you remember, this is the primary signal indicator. The white column of TrendLord histogram serves as a confirmation. When you see such a situation on the chart, open the order.
Here is an example, where you need to enter the market for sale:
On the chart, you can see the simultaneous formation of white columns of both indicators Heiken Ashi and Trend Lord. After the signal, the price turned around, so it was a quite timely entrance to the market.
You need to open a BUY order with the opposite signals. That is, Heiken Ashi should show a green bar, and the green bar should be formed on the Trend Lord histogram. If everything is the same, open an extended position.
Here is an example of such a situation:
The graph shows the change of trend after the signal received. That is, opening the order at this moment, you could make a profit.
Stop Loss and Take Profit can be fixed at the critical levels of support and resistance. Also, you can calculate the fixed values of the limiter and set these figures.
How to Close the Orders following Green Fire Strategy?
There are several ways to close orders in the Green Fire system.
- If you like the fast closing, you can exit the market as soon as the opposite signal of Heiken Ashi appears;
- You can close the order as soon as the Trend Lord histogram shows a different color.
The strategy is quite simple to apply in practice. However, it must be taken into account that, during the flat periods, the Green Fire system will give a lot of false signals, so it's necessary to trade exclusively within the trend. Also, during the period of small fluctuations, the signs of the indicators may not keep up with the price; so, at least, trading during such a period is illogical.
It’s recommended to enter the market with the strong signals - only this thing will protect you from heavy losses. Anyway, remember that any system involves losing trades, and this one is no exception.