Description

Best Ichimoku and Protrading RMA Strategy with 85% Win Rate

This is another strategy you can trade using this indicators as well.

Forex trading can be incredibly rewarding, but finding the right strategy is crucial for success. Among the myriad of trading strategies, the Ichimoku and Protrading RMA (Relative Moving Average) strategy stands out with an impressive 85% win rate. In this blog post, we will delve into the mechanics of this powerful strategy and how you can incorporate it into your trading routine.

What is the Ichimoku Cloud?

The Ichimoku Cloud, or Ichimoku Kinko Hyo, is a comprehensive indicator that defines support and resistance, identifies trend direction, gauges momentum, and provides trading signals. It consists of five main components:

1. Tenkan-sen (Conversion Line): Average of the highest high and the lowest low over the last 9 periods.
2. Kijun-sen (Base Line): Average of the highest high and the lowest low over the last 26 periods.
3. Senkou Span A (Leading Span A): Average of the Tenkan-sen and Kijun-sen, plotted 26 periods ahead.
4. Senkou Span B (Leading Span B): Average of the highest high and the lowest low over the last 52 periods, plotted 26 periods ahead.
5. Chikou Span (Lagging Span): Closing price plotted 26 periods behind.

The space between Senkou Span A and B forms the Kumo (Cloud), which represents future support and resistance areas.

Protrading RMA (Relative Moving Average)

The Protrading RMA is a variation of the moving average that gives more weight to recent data, making it highly responsive to market changes. It’s a preferred choice for many traders due to its effectiveness in identifying trends and potential reversal points.

Combining Ichimoku and Protrading RMA

The strategy combines the trend-following capabilities of the Ichimoku Cloud with the responsive nature of the Protrading RMA. Here’s a step-by-step guide to implementing this strategy:

1. Setup Your Chart: Use a charting platform that supports Ichimoku Cloud and Protrading RMA. Set the Ichimoku Cloud parameters to default (9, 26, 52) and add the Protrading RMA indicator.
2. Identify the Trend:
   • Look for the price to be above the Cloud, indicating an uptrend, or below the Cloud, indicating a downtrend.
   • Confirm the trend direction with the Protrading RMA. If the price is above the RMA, it’s a strong uptrend; if below, it’s a strong downtrend.
3. Entry Signals:
   • Bullish Signal: Enter a long position when the price breaks above the Cloud and the Protrading RMA confirms the uptrend.
   • Bearish Signal: Enter a short position when the price breaks below the Cloud and the Protrading RMA confirms the downtrend.
4. Exit Signals:
   • Long Position: Exit when the price crosses below the Protrading RMA or when the Chikou Span crosses below the price.
   • Short Position: Exit when the price crosses above the Protrading RMA or when the Chikou Span crosses above the price.

Risk Management

Effective risk management is essential for maintaining a high win rate. Here are some tips:

• Position Sizing: Never risk more than 1-2% of your trading capital on a single trade.
• Stop Loss: Set a stop loss below the Kumo for long positions and above the Kumo for short positions.
• Take Profit: Use previous highs and lows or the thickness of the Kumo as potential take profit levels.

Conclusion

The Ichimoku and Protrading RMA strategy is a robust trading method that combines the best of both worlds: the comprehensive analysis of the Ichimoku Cloud and the responsiveness of the Protrading RMA. By carefully following the entry and exit signals and employing sound risk management practices, traders can achieve an impressive win rate of 85%.