Forex Strategies, Forex Trend Following Strategies, Trading-Forex

Zero Lag ASC Trend Forex Trading Strategy

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Zero Lag ASC Trend Forex Trading Strategy 1

Trading with the trend is an excellent trading philosophy to work with. It is much easier than counter-trend trading as it allows traders to trade on the direction of least resistance. Trades are taken in the direction where most traders might be thinking price is going. The clearer the trend, the more traders are going to want to trade in the direction of the trend.

Short-term momentum trading is also another very powerful way to trade the market. In a way, it is much like trend trading. Trades are taken in the direction where the most recent price movements have pushed to. The difference is that momentum trading occurs on a much shorter period.

Zero Lag ASC Trend Forex Trading Strategy combines both trend trading and momentum trading. It uses a variation of the widely used Moving Average Convergence and Divergence (MACD) indicator and a moving average as a basis for the trend, while at the same time identifies momentum based on a custom trend indicator.

Zero Lag MACD

Table of Contents

The Moving Average Convergence and Divergence (MACD) indicator is a staple indicator for many traders. It is used by professional and retail traders in order to identify trend direction.

MACD is a trend following oscillator which determines the trend based on the deviation between two moving averages. This indicator identifies trend direction by determining the difference between a fast and slow moving average. The results are then plotted as a line or a histogram bar. Positive results indicate a bullish trend and negative results indicate a bearish trend.

It also has a Signal Line which is based on a moving average of the MACD itself. Trend reversal signals could also be generated whenever the MACD line and the signal line intersects.

Although the traditional MACD is also very reliable, it is still a lagging indicator. This often causes traders to respond to market movements a bit later than they would want to.

The Zero Lag MACD on the other hand tries to lessen the lag by adjusting the MACD line. Although technically there are no indicators that has zero lag, the Zero Lag MACD does a good job of minimizing the lag, allowing traders to respond to trend changes much faster.

ASC Trend Breakout

The ASC Trend Breakout indicator is a momentum indicator which helps traders identify short-term trend reversals. It then provides entry signals by placing an arrow pointing the direction of the trend on the candle where it detects a short-term trend reversal.

This signal indicator is based on a confluence of short-term reversal signals which are very reliable. Entry signals produced by this indicator tends to be very accurate when aligned with the long-term trend.

Trading Strategy

This strategy trades on momentum entry signals that are aligned with the general trend direction.

The trend is based on the 50-period Simple Moving Average (SMA) and the Zero Lag MACD.

On the 50 SMA, the trend will be judged based on the location of price in relation to the 50 SMA, as well as the slope of the 50 SMA. Although there are trades that could work out even with a flatter sloping trend, trades that agree with the trend of the 50 SMA based on the two factors above tend to have greater accuracy.

The Zero Lag MACD acts as a confirmation of the trend direction indicated by the 50 SMA. Trend direction is based on whether the histogram bars are positive or negative. The Zero Lag MACD trend direction tends to reverse sooner compared to the 50 SMA. This could serve as an additional trend direction filter.

Lastly, entry signals are based on the entry signals produced by the ASC Trend Breakout indicator. However, not all trade signals should be taken. Traders should also judge the behavior of price movements based on price action. A momentum entry candle tends to have a higher probability compared to regular indecisive candlesticks.

Indicators:

  • 50 SMA
  • ASCTrend_BO (default setup)
  • ZeroLag_MACD (default setup)

Preferred Time Frames: 1-hour and 4-hour charts

Currency Pairs: major and minor pairs

Trading Session: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • Price should be located above the 50 SMA line.
  • The 50 SMA line should be sloping up indicating a bullish trend direction.
  • The Zero Lag MACD indicator bars and line should be positive indicating a bullish trend direction.
  • The ASC Trend Breakout indicator should print an arrow pointing up indicating a bullish entry signal.
  • The entry signal candle should be a long full-bodied candle with little to no wicks.
  • Enter a buy order on the confirmation of the conditions above.

Stop Loss

  • Set the stop loss on the fractal below the entry candle.

Exit

  • Close the trade as soon as the Zero Lag MACD bar crosses below zero.
  • Close the trade as soon as the ASC Trend Breakout indicator prints an arrow pointing down.

Zero Lag ASC Trend Forex Trading Strategy 1

Zero Lag ASC Trend Forex Trading Strategy 1

Zero Lag ASC Trend Forex Trading Strategy 2

Zero Lag ASC Trend Forex Trading Strategy 2

Sell Trade Setup

Entry

  • Price should be located below the 50 SMA line.
  • The 50 SMA line should be sloping down indicating a bearish trend direction.
  • The Zero Lag MACD indicator bars and line should be negative indicating a bearish trend direction.
  • The ASC Trend Breakout indicator should print an arrow pointing down indicating a bearish entry signal.
  • The entry signal candle should be a long full-bodied candle with little to no wicks.
  • Enter a sell order on the confirmation of the conditions above.

Stop Loss

  • Set the stop loss on the fractal above the entry candle.

Exit

  • Close the trade as soon as the Zero Lag MACD bar crosses above zero.
  • Close the trade as soon as the ASC Trend Breakout indicator prints an arrow pointing up.

Zero Lag ASC Trend Forex Trading Strategy 3

Zero Lag ASC Trend Forex Trading Strategy 3

Zero Lag ASC Trend Forex Trading Strategy 4

Zero Lag ASC Trend Forex Trading Strategy 4

Conclusion

This momentum strategy is a good trend trading strategy which has a combination of a decent win rate and reward-risk ratio. Some trades could produce high yields while some would produce small gains here and there.

The key to this strategy is in identifying short-term momentum movements based on price action. This is because momentum tends to carry over to the next few candles which produces the gains that we desire.

Trade management skills, such as moving and trailing stop losses, is very important with this type of strategy. This would allow traders to be more consistent with this strategy. Other traders who are proficient in reading price action would also do better if they manually close their trades based on price action signals.


Forex Trading Strategies Installation Instructions

Zero Lag ASC Trend Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

Zero Lag ASC Trend Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install Zero Lag ASC Trend Forex Trading Strategy?

  • Download Zero Lag ASC Trend Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover on “Template”
  • Move right to select Zero Lag ASC Trend Forex Trading Strategy
  • You will see Zero Lag ASC Trend Forex Trading Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

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