Rustle of the Morning Stars H4 Mod - according to Bill Williams' precepts

Platform: Any Currency pairs: AUDJPY, AUDUSD, EURAUD, EURUSD, EURGBP, EURJPY, GBPUSD, GBPJPY, USDJPY Timeframe: H4 Trading time: Around the clock (we do not trade on Friday) Recommended brokers: Alpari , Roboforex

TS Setup

The strategy requires the AO (Awesome Oscillator) indicator, which is available in any terminal. By default, the indicator has only one level - at the zero mark. For the strategy to work, you need to add two additional levels - one above and one below zero. Each pair has its own level value, depending on volatility:

• GBPJPY: 1.0
• AUDUSD:  0.005
• EURAUD:  0.005
• EURGBP:  0.005
• EURUSD:  0.005
• GBPUSD:  0.005
• AUDJPY:  0.3
• USDJPY:  0.3
• EURJPY:  0.3

For the GBPUSD pair, these are the levels 0.005 and -0.005.

Rules for working with the TS

First of all, we look at the crossing of the zero mark. As soon as AO crosses the zero line, this serves as the first sign of a signal forming for entry. After that, we wait for a sufficient price impulse to appear - the AO bar must cross the level we have set. When AO is already below the -0.005 level, we wait for the appearance of two green bars in a row to enter a sell trade. If AO is above the 0.005 level, we wait for two red bars to appear to enter a buy trade. That is, the basic principle of operation is as follows: we wait for an impulse from the indicator; we wait for a small correction from the impulse, and place a pending order at the formed price extremum. AO levels should filter out false indicator signals when the initial impulse is too weak. As soon as the signal is received, we stretch the Fibonacci grid. The grid should be set relative to the minimum and maximum over the period from the AO crossing of the zero mark to the appearance of the two signal bars. Next, we place a pending order slightly below the local extremum for the same period. In this case, we place a sell order - Sell Stop. The Stop Loss level is set at the local maximum, take profit at the Fibonacci 161.8 level. If the pending order is not triggered, we cancel it on the reverse crossing of the zero mark.

Additionally

• We trade only the first signal after the AO zero level crossing
• Take into account the price close after the second bar - the distance to the pending order. If it is small, then we wait for a pullback
•  Large candles - if there is a large candle between the vertical levels (which we build for stretching the Fibonacci) (nonfarm or other news), in this case either skip it, or ignore the candle and stretch the Fibonacci without taking it into account, or think according to the situation.
• If you see that the take is much smaller than the stop loss, it is better to skip the signal. Or reduce the stop, if the situation on the chart allows it.

Money Management

No more than 5% per trade. You can calculate the trading lot using a special calculator.

Examples

Example 1. After AO crossed the -0.005 level, we wait for two green bars to appear and place a Sell Stop at the local minimum. We set the stop loss at the local maximum, take profit at the 161.8 level of the Fibonacci grid. Here everything went according to plan, the price closed at take profit. Example 2. In this case, we open upward, therefore we place a Buy Stop pending order at the local maximum. We do not cancel the order until AO crosses the zero mark. The order was triggered, but closed at stop. Example 3. In this case, the take profit turned out too small, so we cancel the trade. As an option, you can reduce the stop loss and leave the order, but in that case the probability of a successful trade will be lower. Example 4. The price did not catch the order, so we cancel it as soon as AO crosses the zero mark. Example 5. After two red bars appear in a row, we place a Buy Stop order at the local maximum. After the order was triggered, we got two more buy signals. If you wish, you can use them to add to the main position or re-enter, but the reliability of such signals will be lower.

Conclusion

The "Morning Star Rustle" trading system is a logical continuation of the ideas of Trading Chaos and Bill Williams' Profitunity strategy. In order not to wait too long for new signals to appear, use a large number of currency pairs in trading. At the same time, do not forget about proper money management, especially if you are going to open more than one position at a time. Also, do not forget about the release of important news, such as Nonfarm Payrolls. For this reason, Friday is excluded from trading, since it is on this day that the largest number of financial reports are released, which can negatively affect strategy trading. In principle, the strategy is quite balanced - it does not require much time to work with and brings good profit.

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