Detetrend Price Trading System” system for Forex trading
This medium-term trading system is based on the little-known DPO indicator. The system is suitable for all currency pairs. The hourly schedule is used for operation. Detrended Price Oscillator DPO is an indicator of technical analysis, which shows the state of overbought or oversold and can give signals to buy and sell. DPO tries to filter out trends in order to focus on the main cycles of price movement. For this purpose, the moving average turns into a straight line, and the change in price above and below the moving average becomes a price oscillatoromus. The Detroit price oscillator compares the closing prices with the previous moving average, except for cycles that are longer than this average. Calculated as a moving average with n periods window, shifted backwards by (n/2)+1. The system also uses MA3 and MA15 moving averages. The oscillators “MACD (12,26,9)” and “ADX 14 DM” are used to filter the signals.
There are a number of conditions to be met in order to enter the purchase:
1. DPO crosses up the zero line.
2. The MACD line must be above the signal line.
3. The +D line must be higher than -DI
4. Finally, the MA3 line must cross up to 3 candlesticks after crossing the DPO.
In addition to the basic conditions, an upward crossover of a downtrend line is an additional, but not obligatory, condition. A downward crossover of an uptrend line can be a signal for profit taking. The stoploss is set below MA15 and can move as the price rises.
The conditions for sale are defined in the same way.
1. DPO crosses the zero line down.
2. The MACD line must be below the signal line.
3. The +D line should be lower than -DI
4. The MA3 line must cross the MA15 down to 3 candles after crossing the DPO.
An additional condition is the downward crossover of an uptrend line. The stoploss is set below MA15. Profit fixation is possible in different variants at the trader’s discretion. Usually positions are closed when the DPO zero line is crossed. But you can also set a fixed Take Profit at the rate of average daily volatility or use a trailing stop
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