The forex market is a gold mine of opportunities. Different market conditions and scenarios provide different opportunities for traders to make money out of the market.
One of the most lucrative scenarios for traders are when the market starts to gain momentum and start a rally, or on the flip side starts to drop steeply. This usually occurs whenever there is pent-up volume waiting for a trade. As soon as the market volume start to rush in, price candles start to move strongly in one direction. Momentum builds up. Then, before you know it, the market has started to trend. Momentum trading is very appealing to many because it usually is the start of a strong market trend. Traders who are able to take the trade entry at the start of the trend are in for a good ride and have the opportunity to make huge yields in one trade.
3D Tunnel Breakout Forex Trading Strategy is a strategy that capitalizes on such momentum breakouts. It uses a pair of high probability technical indicators that allow traders to identify if the market is gaining momentum or not. Traders who could capitalize on such momentum breakout could earn huge yields on such trades.
The 3D Oscillator indicator is a custom technical indicator which helps traders identify momentum and short-term trend reversals. It is based on a combination of underlying parameters such as the Relative Strength Index (RSI) and the Stochastic Oscillator.
This indicator is an oscillator which plots two lines much like the Stochastic Oscillator. However, instead of limiting the line much like the classic Stochastic Oscillator, the lines in this indicator could move in a free range. The lines could be positive or negative. Positive lines are indicative of a bullish trend, while negative lines are indicative of a bearish trend. As such, lines that are crossing above zero could indicate a bullish trend signal, while lines that are crossing below zero could indicate a bearish trend signal.
The crossing over of the lines with each other are also indicative of a possible trend reversal. If the faster line is crossing above the slower line, then it could be taken as a bullish signal. On the other hand, if the faster line is crossing below the slower line, then it could be used as a bearish signal. The indicator also plots dots below the lines to indicate a bullish crossover, or below the lines to indicate a bearish crossover.
The Arrows and Curves indicator a technical indicator that helps traders identify momentum breakouts.
This indicator is based on a channel indicator which marks the threshold where price could be gaining momentum. If price is breaking above the channel, this could be considered as a bullish momentum breakout. On the other hand, if price is breaking below the channel, the market could be gaining a bearish momentum.
The indicator also plots arrows signaling the breakout points. These arrows could be used as an entry signal in a momentum breakout type of strategy.
This strategy uses the confluence of the 3D Oscillator and the Arrows and Curves indicator to produce momentum breakout entry setups.
On the 3D Oscillator, the signal will simply be based on the crossing over of the lines from negative to positive or vice versa, depending on the direction of the breakout trade. Ideally, both lines should be crossing over. However, there are instances wherein the momentum breakout occurs in one candle, which makes the slower line lagging. In this case, it is fine to take the signal of the faster line as long as the slope of the lines are steep.
On the Arrows and Curves indicator, price should break out of the channel. This would be followed by an arrow being plotted by the indicator pointing the direction of the breakout.
Trades are taken based on the confluence of these signals. However, price action and candlesticks should also be observed. A strong momentum candle adjacent to the entry candle would be a very good additional confirmation of the momentum breakout.
Preferred Time Frames: 1-hour and 4-hour charts
Currency Pairs: majors, minors and FX crosses
Trading Sessions: Tokyo, London and New York sessions
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