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797# TMA Cloud Strategy

TMA Trend Following Strategy

Cloud Trend Indicator MQ4

Submit by Alonso

 

TMA Cloud Strategy is an trend following strategy based on TMA bands and two complex indicators trend following.

The indicators that formed this trading system are three:

TMA band (period 60, atr 6.0, atr period 120).

 

TMA indicator is our primary indicator used with this system. The indicator draws 3 lines on your price chart, i.e. the upper, middle and lower CloudTMA lines. 

Cloud price:MA 1° 13 period, MA 2° 20 period, o identify Bullish and Bearish trends by drawing Blue (Bullish) and Orange (Bearish) colored bars in a Histogram, this indicator to confirm the trend direction before we enter any potential trades.

 

Cloud Trend: MA 14 period, Bollinger Bands 2.0, identify Bullish and Bearish trends by drawing Dark Blue (Bullish) and Orange (Bearish) colored bars in a cloud pattern. We will also use this indicator to confirm the trend direction before we enter any potential trades. 

TMA Cloud Strategy
TMA Cloud Strategy
TMA Cloud Strategy
TMA Cloud Strategy

Trading Rules TMA Cloud Strategy

 

 

Buy

 

  1. Wait for price to cross and close above the middle Cloud TMA indicator line.

  2. Check and confirm that the Cloud Price indicator has formed a Blue colored bar above the 0 level.

  3. Check and confirm that the Cloud Trend indicator is Blue in color.

  4. Enter a Buy trade at the open of the next candle.

  5. Place your Stop Loss a few pips below the most recent Swing Low or at a maximum of 20-30 pips away from your entry level.

  6. Place your Take Profit the same distance away from your entry as your Stop Loss, i.e. 1:1 Risk/Reward Ratio (a 1:2 Risk/Reward Ratio is also acceptable). NOTE: Sometimes the Cloud Price and Cloud Trend indicators may not turn Blue in color and confirm the Buy trade on the close of the crossover candle. In these cases, you may still consider entering a Buy trade if the Cloud Price and Cloud Trend indicators turn Blue on the very next candle after the crossover candle has close. 

Sell

 

  1. Wait for price to cross and close below the middle Cloud TMA indicator line.

  2. Check and confirm that the Cloud Price indicator has formed an Orange colored bar below the 0 level.

  3. Check and confirm that the Cloud Trend indicator is Orange in color.

  4. Enter a Sell trade at the open of the next candle.

  5. Place your Stop Loss a few pips above the most recent Swing High or at a maximum of 20-30 pips away from your entry level.

  6. Place your Take Profit the same distance away from your entry as your Stop Loss, i.e. 1:1 Risk/Reward Ratio (a 1:2 Risk/Reward Ratio is also acceptable). NOTE: Sometimes the Cloud Price and Cloud Trend indicators may not turn Orange in color and confirm the Sell trade on the close of the crossover candle. In these cases, you may still consider entering a Sell trade if the Cloud Price and Cloud Trend indicators turn Orange on the very next candle after the crossover candle has closed. 

Buy Trade Example

 

If you’re looking to master a new trading system you need to go through as many trade examples as possible. So, in this chapter I’m going to get you started with a few examples that will help re-enforce the system rules you have just learned. On the right hand side you can see an example of a Buy trade that was taken on the EURUSD currency pair. At the time I was monitoring the 1 Hour time frame when I spotted the valid trade signal. At Point 1 you can see that there is a crossover above the CloudTMA middle line. At this moment in time I checked the CloudPrice indicator to confirm that is was Blue in color. As it turns out, at Point 2 the CloudPrice indicator confirmed the Buy trade signal with a Blue bar above the zero line. Next, I checked the CloudTrend indicator to confirm that the market was indeed Bullish. At Point 3 you can see that the indicator is Dark Blue in color confirming the Bullish trend. Since all the conditions for a Buy trade were met, I waited for the candle to close and at the open of the next candle I decided to enter the market with a Buy trade. The Entry level can be seen at Point 4. Immediately after entering the trade I went ahead and set my Stop Loss at Point 5 so that it was below the most recent Swing Low. Next, I went ahead and set my Take Profit level at Point 6. Note that the distance from my Entry level to my Take Profit is the same distance of my Stop Loss to my Entry level giving me a 1:1 Reward to Risk Ratio. In this case my Stop Loss was 20 pips away from the Entry level and my Take Profit level was also 20 pips away from the Entry level. As you can see, the trade goes on to hit my Take Profit within a few candles and I am taken out of the trade with a healthy profit. 

Sell Trade Example

 

Here’s another example trade but this time around, I’ll be trading in the Short or Sell direction. On the right hand side you can see an image of a Sell trade signal that was taken on the EURUSD currency pair. I was monitoring the 1 Hour time frame when I spotted this trade signal. Everything lined up perfectly and I decided to jump in on this trade immediately. At Point 1 you can see there is a clear crossover below the dotted CloudTMA middle line that signals a Sell trade. At the same time I checked the CloudPrice indicator to confirm that is was Orange in color. As you can clearly see at Point 2 the CloudPrice indicator has confirmed the Sell trade signal with an Orange colored bar below the zero line. Next, I checked the CloudTrend indicator to confirm that the market was indeed Bearish. At Point 3 you can see that the indicator is Orange in color confirming the Bearish trend. Since all the conditions for a Sell trade were met, I waited for the candle to close and at the open of the next candle I decided to enter the market with a Sell trade. The Entry level can be seen at Point 4. Immediately after entering the trade I went ahead and set my Stop Loss at Point 5 so that it was above the most recent Swing High. Finally, I set my Take Profit level at Point 6. Note that the distance from my Entry level to my Take Profit is the same distance of my Stop Loss to my Entry level giving me a 1:1 Reward to Risk Ratio. In this case my Stop Loss was 25 pips away from the Entry level and my Take Profit level was also 25 pips away from the Entry level. The trade goes on to hit my Take Profit and I am taken out of the trade with a fair profit. 

TMA Cloud Strategy
TMA Cloud Strategy
TMA Cloud Strategy
TMA Cloud Strategy
TMA Cloud Strategy.rar
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