So lately I've been using an Envelope indicator, and nothing else. I have it set to a 3-period smoothed MA on MT5, which is basically the same thing as 6 exponential on TradingView. From there, for every pair, I fine-tune the envelope's deviation range to create a very specific situation.
1) You want consolidation candles to generally close inside of the envelope. Most candles should close inside the envelope, or at least have presence on the inside. Sometimes trends are stupidly strong, though.
2) You want momentum candles to close outside of the envelope.
So how do you trade it? Simple.
1) When a momentum candle closes outside the envelope, you look to enter a position on the inside of it.
2) You place a hard stop loss, which could be a 1:1 if you think in ratios, or a specific amount of money that you're willing to lose. The stop should be reasonably wide, like pretty distant from the opposite side of the envelope, because wicks happen all the time.
3) You close with a loss *only* if the price either hits your hard stop (unlikely), or if a candle closes on the wrong side of the envelope. This is important!
4) You take profit either when you're happy (typically 1:1 or greater), or with a trailing stop loss.
The purpose of this trading system is to trade the *exact* trend you're on currently, rather than going for some kind of fibonacci pullback or whatever. On top of that, your losses are well controlled since your entries usually won't be far from your exit if you're wrong.
Example:
1) You want consolidation candles to generally close inside of the envelope. Most candles should close inside the envelope, or at least have presence on the inside. Sometimes trends are stupidly strong, though.
2) You want momentum candles to close outside of the envelope.
So how do you trade it? Simple.
1) When a momentum candle closes outside the envelope, you look to enter a position on the inside of it.
2) You place a hard stop loss, which could be a 1:1 if you think in ratios, or a specific amount of money that you're willing to lose. The stop should be reasonably wide, like pretty distant from the opposite side of the envelope, because wicks happen all the time.
3) You close with a loss *only* if the price either hits your hard stop (unlikely), or if a candle closes on the wrong side of the envelope. This is important!
4) You take profit either when you're happy (typically 1:1 or greater), or with a trailing stop loss.
The purpose of this trading system is to trade the *exact* trend you're on currently, rather than going for some kind of fibonacci pullback or whatever. On top of that, your losses are well controlled since your entries usually won't be far from your exit if you're wrong.
Example: