Forex Profit Boost Indicator - a Profit Hurricane

Good day! Simple trading systems, as is well known, do not necessarily have to be unprofitable. Today we will look at Forex Profit Boost - a simple indicator that by itself is almost an entire trading system. This indicator is hybrid and consists of two classic indicators: Bollinger Bands and moving averages.

Platform: Metatrader 4
Currency pairs: trending
Timeframe: any
Trading time: depends on the trading tactics

The Forex Profit Boost indicator is installed according to the standard instructions. There should be no difficulties.

- 0 - simple averaging;

- 1 - exponential averaging;

- 2 - smoothed averaging;

- 3 - linear weighted averaging.

As I already said, the indicator consists of several classic indicators, Bollinger Bands and two Moving Average. This indicator is trend-following, accordingly it gives the best results when working in trending markets; in a quiet market it will give many false signals (that is, filters are needed). The indicator shows the presence and strength of a currency pair trend. A total of three colors are used for signals - by default these are yellow, blue, and red. As you have probably guessed, the red color signals the presence of a bearish trend, while blue says that bulls are ruling the market at the moment. Yellow indicates a weakening of the current trend, a possible change of trend, the beginning of a pullback, or a flat segment. The more yellow color there is, the more likely a trend change becomes.

In my opinion, working with it will be more effective on higher periods, from four-hour charts and above, although the authors claim that it will work well on any periods. On periods less than four hours, the indicator gives many false signals, although perhaps they can be reduced by competent selection of parameters for a specific period and additional filtering of trades.

The indicator includes several classic indicators: Bollinger Bands and two Moving Average - one of them is configured in the settings, the second MA is a simple moving average built on closing prices with an averaging period of 21. When the configurable moving average is above MA21, the indicator will be colored blue; when it is below, red. This is how the presence and direction of the trend are determined. The closer the moving average is to the Bollinger boundaries, the less yellow color there is, and the stronger the trend. The indicator does not repaint and is simple to use and configure.

For the subsequent screenshots I overlaid on top of the indicator: classic Bollinger Bands and a moving average in order to more clearly highlight the boundaries of the histogram. The authors of the indicator offer two options for extracting signals - aggressive and conservative. I will start, perhaps, with the first.

The first, aggressive signal option appears when the indicator histogram changes color from red to blue and vice versa, that is, when the trend direction changes. In this case, when bullish sentiment changes to bearish sentiment (circle number 1 in the screenshot). Despite the fact that in the example we entered at the very beginning of the emerging bearish trend and could have taken quite a few points from such a trade, in a low-volatility market you would have managed to take a loss many times before you jumped into a truly worthwhile trade.

The second, conservative entry option involves waiting for a pullback after a new trend appears with subsequent continuation, thereby slightly increasing the probability of catching the trend (circle number 2 in the screenshot). In other words, we enter a trade after the price has pulled back and then moved in the desired direction (the yellow histogram bars began to decrease in size).

And although I did not find any rules for exiting positions from the indicator's authors, I still propose two different exit options as well. For conservative traders, an exit when yellow histogram bars appear will do (point 3 in the screenshot). With more aggressive trading, you can exit when the indicator changes from red to blue (point 4). Aggressive traders can also use small pullbacks to add to existing positions (point 3 in the screenshot).

Both entry options will give decent results with the right filters. In this case, since the Forex Profit Boost indicator is trend-following, I mean, of course, oscillators. MACD is quite suitable for this task:

On our forum, forum member 2nb came up with an original strategy that uses only this indicator. The work is done on the M5 period of the EURUSD pair during the London session. The essence of the strategy is as follows.

On the D1 period, we look at the color of the closed bar (the previous day). We will trade in its direction. If the previous daily indicator bar is red, we consider only sells; if it is blue, only buys.

Next, we move to M5 and look directly for the entry point. We are looking for a pullback from the main trend; for example, in a bullish trend we wait for a red-colored section to form, and then after the close of the first blue bar we place a limit order at approximately its midpoint.

We set the initial stop loss at the low shown by the pullback, and we do not set a take profit. When a profit of 20 points is reached, we move the position to breakeven. At a profit of 30 points, we begin to trail the stop loss behind the price in such a way that in the event of a price reversal we would preserve 2/3 of our profit. You can familiarize yourself with the results of this tactic in the indicator thread on the forum.

The ForexProfitBoost indicator, quite simple to use yet fairly effective, is worth trying in your system. It gives quite decent signals in a trending market, and when using additional filtering methods such as candlestick patterns, levels, or oscillators, it represents a ready-made trading system.

Respectfully, Dmitry aka Silentspec
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