An indicator signals-based trading strategy uses technical indicators to generate buy and sell signals. These signals are based on specific conditions or criteria defined within the indicators. The strategy involves entering and exiting trades when these signals occur, aiming to profit from market movements.
Tools Required – TRED Indicator Toolkits
Features to enable
- Smart Entry Signals
- Trend Analyzer Wave
- Order Blocks
✦ Entry Conditions
Confirmation one – Shows a BUY or SELL signal on the chart.
Confirmation two – If the BUY signal is visible on the chart, the trend wave should be blue. If the SELL signal is visible on the chart, the color of the trend wave should be red. It shows the favorable conditions to enter into the trade.
✦ Exit Conditions
To define exit conditions for a signals-based trading setup, here are some rules.
If it is a BUY trade, the candle should be crossing the trend wave in the downward direction, and the color of the trend wave should be turned into red from blue. It shows the upcoming bearish trend of the market and the bullish position should be exited by here.
Similarly, if it is a SELL trade, the candle should be crossing the trend wave in the upward direction, and the color of the trend wave should be turned into blue from red. It shows the upcoming bullish trend of the market and the bearish position should be exited by here.
✦ Conclusion
The above chart shows the entry, exit, and stop loss levels. The entry should only be taken on the candle that meets all the entry conditions mentioned in the entry rules above. To place a stop loss, the recent order block can act as a stop loss level. And, the positions could be exited on the candle that meets all the exit conditions mentioned in the exit rules.
Note: This trading setup follows the premade conditions of the TRED Premium Indicator and is not to be followed blindly. Define your risk before entering into any indicator-based trading system.