The X-ray Elder trading system is one of the popular and well-known strategies developed by Dr. Elder.
The strategy works on all currency pairs and is best suited for H1. The essence of the strategy is to determine the alignment of the strength of the Bulls and the strength of the Bears. Trades are made only in the direction of the trend.
Let’s consider how the strategy works using the example of the USDCAD currency pair. All parameters are given only for her.
The parameters of other currency pairs may differ, they are selected according to historical data.
On the chart of the USDCAD currency pair, adding standard indicators that are in the MT4 terminal.
1. BearsPower (68) – calculation formula: subtract the current low of the candle from the average (EMA). The resulting difference in the form of a histogram will be in the lower window.
2. BullsPower (164) – calculated in the same way and also displayed as a histogram.
3. The exponential moving average is used with a period of 34 at close prices.
EMA (34) is needed for additional confirmation of signals. When the EMA (34) is directed upwards, we make only long positions, if downwards, we make sell deals. That is, if the price of the hourly candle closed above the moving average, then we only make purchases, if the price closed below the moving
average, we make sell deals.
The chart shows an example of a purchase:
• Bears histogram is in the negative zone and is gradually increasing.
• The price crossed the average and the hourly candle closed above this average!
• At the opening of the next hourly candle, we make a buy.
• StopLoss is set below the nearest local minimum.
• The Take Profit value is set 2-3 times higher than the value of the resulting StopLoss.
Closing a position:
2.or by take profit
3. or on the opposite Bulls signal (for buying). For sale – by Bears.