High accuracy H4 Time Frame Forex LSMA CCI Trend Strength Trading System and Strategy – This H4 Chart Advanced Forex Trading System is also good for trading on the Binary Options.
One of the most important features of trend following strategies is that even if you’re wrong on the trade, usually you can limit your losses because ultimately the market will reverse and resume the trend.
But, at the same time, which is even more important, it maximizes the potential profit as well.
The LSMA CCI Trend Strength Trading System and Strategy works best on the higher time frames like the 4H chart or the Daily chart.
So if you’re a swing trader this is the perfect strategy for you.
The LSMA or Linear Regression Indicator is also called “End Point Moving Average”.
This Indicator is applied for trend identification & trend following in the same way as moving averages.
LSMA helps to identify forward projections from the current period by calculating the least squares regression line for the preceding time periods.
Therefore, the indicator can suggest the possibility of what could happen if the regression line continues.
How do we calculate the Least Squares Moving Average?
The indicator is based on sum of least squares method to find a straight line that best suits data for the selected period.
The end point of the line is plotted and the process is repeated on each succeeding period.
The formula for calculating the line of best fit is:
In the chart below:
We can notice that, the LSMA indicator has been applied in the in the 4H chart of GBPUSD.
The default settings of 21 Day – LSMA has been applied.
when the price deviates from the indicator.
The LSMA generates signals.
Now, like any other moving average, we need to assess when the least squares moving average is indicating a change in trend.
If the signal changes to an uptrend along with recovery in prices, a BUY signal is generated.
If the signal changes to a downtrend along with a fall in price, a SELL signal is generated.
This is trend following trading system.
- Best Time Frames: 4H and Daily
- Most Recommended Currency Pairs: EURUSD, GBPUSD, EURUSD, and all major pairs
- LSMA Trend Grail
- Trend Strength
- Zerolag Stochastic
- 21 LSMA Trend Grail green color
- 8 LSMA Trend Grail green color
- 8 LSMA Trend Grail upward and above 21 LSMA Trend Grail
- Z-Winner-CCI lime color line
- Zerolag Stochastic bullish (the blue line upward and above the red line)
- Trend Strength bullish (up trend arrows > down trend arrows)
- 21 LSMA Trend Grail red color
- 8 LSMA Trend Grail red color
- 8 LSMA Trend Grail downward and below 21 LSMA Trend Grail
- Z-Winner-CCI lime color line
- Zerolag Stochastic bearish (the blue line downward and below the red line)
- Trend Strength bearish (downtrend arrows > up trend arrows)
Profit Target predetermined (examples EUR/USD 60 pips, AUD/USD 55 pips, USD/CHF 50 pips, GBP/USD 60 pips, GPB/GPY 70 Pips).
Place initial stop loss on the previous swing, after 30 pips in gain move stop loss at entry position.
This high accuracy H4 Time Frame Forex LSMA CCI Trend Strength Trading Strategy is also good for trading on the Binary Options.