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L.U.V Trend Candlestick Strategy

Passionate traders with discipline and proper risk management will find this strategy valuable. As always, follow the rules of the strategy, keep the winners, and cut the losing trade when SL hits. 

Strategy Idea

  • Settings explained apply to Long Only!

The strategy aims to find reversals with the use of BellCurve. BellCurve indicator identifies market impulses and the height of the BellCurve is a measure of the strength. Equally high Bellcurves means that the strength in the Impulses is equally strong. This enables us to compare Bellcurves with each other to understand how strong the current Impulse is in relation to the previous ones.

BellCurve shows us the most important Impulses, however, there are tons of smaller Impulses that we don’t see in the indicator and hence we can not identify all potential reversals. We solve this by using the scale of the BellCurve to generate the coloring for the Trend CandleStick, this enables us to see all potential reversals points.

BellCurve is good for understanding if an Impulse is complete, but this strategy makes it possible to identify if an Impulse is about to complete in real-time and hence we may have a very good entry. The strategy will also show how you get a more “certain” entry by entering on the first pullback.

Indicators Needed

  • Trend Candlestick (Expo)
  • BellCurves (Expo)
  • Confirmation (Expo)

Trend CandleStick Setting

Custom Source: Use BellCurve “Negative BellCurve”

When you have chosen the BellCurve, you have to disable the “Show Retracement Line”. If you have it enabled you will have scaling problems.

The Stop Loss line will work no matter which input you have selected.

BellCurves Settings

Input Source: Use High if you have chosen Negative BellCurve as input for Trend CandleStick and Low if you have chosen Positive BellCurve as input for Trend CandleStick.

Scale: If you can’t see any values on the BellCruve scale, increase the scale with some zeros. You usually have to do this for FX.

It’s important that you have values on the BellCurve Scale since it’s used to generate the coloring in Trend Candlestick.

Confirmation Settings

Input Source: Use High if you have chosen Negative BellCurve as input for Trend CandleStick and Low if you have chosen Positive BellCurve as input for Trend CandleStick.

Trend Length: I have set it to 7 to make it react quicker. If you prefer more certainty you may find value 9 or 14 more valuable.

  • Enable Smoothness
  • Set MAgnify Overbought/Oversold to 2
  • Use WMA for Trend Method.

Your Choice

  • Trend CandleStick comes with a Retracement Line and a Stop Loss Line. You can use either of them, it’s your choice. I myself use the Retracement Line and I will therefore explain the strategy based on it.

 

If you use the Retracement line you need to have 2 layers of Trend CandleSticks (Expo) on the chart.

One that uses the BellCurve as input. Then you have to disable the Retracement Line and the Stop Loss Line. And one that uses Close as input, and on this one, you have to enable the Retracement line and disable the Stop Loss Line and the BarColor!

Trend CandleStick #1

Input Source

  • BellCurve

Enable the following:

  • Show BarColor

Disable the following:

  • Show Retracement Line
  • Show Stop Loss

 

Trend CandleStick #2

Input Source

  • Close

Enable the following:

  • Show Retracement Line

Disable the following:

  • Show BarColor?
  • Show Stop Loss

 

With the settings above your chart should look like this!

Entry/Exits & Target/Stop Loss

Aggressive Entry

This entry is more “aggressive” since we enter when the price crosses the retracement line.

  1. The candle coloring is light blue.
  2. A negative Bellcurve is shown.
  3. The confirmation Line is Green.
  4. Price crosses over the retracement line and the candle color are still light blue.
  5. Enter Long!

Normal Entry

This entry is more “certain” since we wait for the price to bounce off the retracement line showing us that there is a buying interest. This entry style requires us to check what has happened recently in the chart.

  1. The candle coloring shall have been light blue recently.
  2. A complete negative BellCurve shall be shown.
  3. The confirmation line shall have been above value 0 previously (in positive territory), and shall not be under value -2.
  4. Price hits the retracement line that has a positive slope.
  5. Enter Long!

Stop Loss

  • Set Stop Loss at previous low.
  • Or you use a trailing stop of your choice.

    Take Profit – Method One

    • Take profit if price crosses under the retracement/trailing line.

      Take Profit – Method Two

      • Take profit if price crosses under the retracement/trailing line.

        We hope that you gonna find this strategy valuable! If you have any questions or suggestions on how to make it even better please let us know!

          Disclaimer

          Copyright by Zeiierman.

          The information contained in my scripts/indicators/strategies/ideas does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

          All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.

          My scripts/indicators/strategies/ideas are only for educational purposes!