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Introduction

Momentum based trading strategy is an investment strategy that aims to capitalize on the continuance of existing trends in the market. In order to take advantage of the perceived opportunity, a trader takes a long position in a currency pair that has shown an upward trending price, or short-sells a security that has been in a downtrend. The idea being once a trend is established, it is more likely to continue in that direction than to move against the trend.
This article looks at how we can create a momentum based trading strategy in Visual JForex using the Commodity Channel Index (CCI) and Stochastic indicators.
What is Visual JForex?

Visual JForex is a comprehensive solution to build, test and run strategies; it is based on a user-friendly interface using drag and drop feature. It has a unique way to develop fully automated strategies using blocks linked to each other to build a complete and ready-to-execute forex strategies. The platform is web based presenting a flash user interface with a Java backend.

Fig 1: Visual JForex platform.

Momentum indicators

  • Commodity Channel Index
The CCI is an oscillator introduced by Donald Lambert in 1980 that is useful …
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Sanju777 avatar
Sanju777 12 Mar.

nice

Verona888 avatar
Verona888 12 Mar.

Well done)

Vlad73 avatar
Vlad73 16 Mar.

well done

miss_natalia_77 avatar

Good ))

Yonggi7 avatar
Yonggi7 27 Apr.

This article is well presented ! I liked the concept of Momentum based on different useful kind of trading strategy actions! Congratulations!

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4/30
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I like testing different settings for trading. Newest setup and strategy I found is double Bollingers and stochastic. Our chart setup will be:
Timeframe: 5min
Bollinger 1: 21
Bollinger 2: 89
Stochastic: 5;3;3
Bollinger 1 will be our main trend indicator and Bollinger 2 will be bigger trend indicator. Bollinger 2 will tell us when not to trade and when we trade.
We can use stochastic to get enter signal. But scalpers who make short trades can trade without stochastic also.
Our chart will look like this:
Rules:
DO NOT TRADE when Bollinger 1 is in the center of Bollinger 2 or crosses the central band of Bollinger 2.
BUY: When the Bollinger 1 band is above the central band of Bollinger 2 and price is above the central band of Bollinger 1. We also can buy when Price bounces on lover band of Bollinger 1 when the lower band of Bollinger 1 is on or very close to the central band of Bollinger 2.
Buy signal from stochastic: Stochastic have to be below 50 or 20 and show sign of strength while price slows down on central and lower band of Bollinger 1.
Sell: When Bollinger 1 is below the central band of Bollinger 2 and price is bellow central band of Bollinger 1. We also can sell when price bou…
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tdbatinkov avatar
tdbatinkov 31 Jan.

interesting

Durden avatar
Durden 1 Feb.

Did you have some backtest?

WonderM avatar
WonderM 2 Feb.

дуже добре

yellownight avatar

good luck in contest

Alekc_Force avatar

Ok. Good

orto leave comments
4/28
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The ADX index compared to MACD, RSI and Stochastic is less used indicator. Mostly long-term traders use it and mostly in stock trading. The ADX is used to measure and check quality of the trend. İt has very simple approach and display to use.
Keep in mind the indicator measures only strength but not directional of the trend. Trend and ADX may move in the same and opposite direction with the trend. In a strong downtrend, ADX will rise as it happens in strong uptrend. ADX will drop when trend weakens. We may say that ADX shows convergence in the beginning of strong uptrend and will show divergence when uptrend weakens. Vice versa, ADX will show divergence with strong downtrend and convergence at the end of the downtrend.
The levels of ADX shows quality of the trends. This allows us to choose the strongest trends to enter and ride it until it weakens.
To use ADX we will setup our chart like this:
To filter the trend strength, we look to ADX levels. Bes entrance will be above 25. If ADX climbs above 25 in uptrend we look for buy but option when ADX climbs 25 in downtrend we look for sell option.
ADX level expressions are:
We will setup our chart to trade with adx.
Timeframe: 4…
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Miren avatar
Miren 7 Nov.

good article!

alenka27 avatar
alenka27 10 Nov.

Интересный материал!

al_dcdemo avatar
al_dcdemo 10 Nov.

Great strategy. Very well explained!

inswe7 avatar
inswe7 15 Dec.

very good

expertmarss avatar

great strategy

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2/54
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Dear Dukascopy community. I stated trading in smaller timeframes. Wanted to test scalping. So far it was working. In addition, i want to share it with you. We will need to setup our chart first. I will explain systematically.
Our setup:
  1. We need to add 55 sma and 144 sma.
  2. Then add Bollinger Bands. Setting will be 21 for period and 2 for deviations.
  3. After that, we add Stochastic. Settings will be 8 for period and 3 for both sma.

How we trade?
Rulse 1: Trend is your friend!

144 SMA and 55 SMA are for following general trend. Yes, I know that we try to be smarter than everyone and catch the trend reversal but let us be realists and just keep following trend. When slow sma is above fast sma then we have declining trend. However, if fast sma is above the slow sma then market is in rising trend. We are prefer sharp trends. Sharper than 40degree is better.
We will look into Bollinger’s central and lower Bands in rising trends and upper and central bands for declining trends. Central band of Bollinger have to be above 55 sma and rising for us to think about buying in rising trend. In a declining trend central band and have to be below 55 sma.
Stochastic indicator will h…
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zss avatar
zss 30 Sep.

спасибо!

LS92 avatar
LS92 30 Sep.

good work

Vlad_55 avatar
Vlad_55 30 Sep.

Достойная работа!

Klaudia25 avatar
Klaudia25 30 Sep.

great article

mcrakqjt avatar
mcrakqjt 3 Jan.

Buen artículo

orto leave comments