Profitable Forex Strategy for Beginners “Trancient Zones”
Forex trading strategy for beginners “Trancient Zones” is a simple indicatorless vehicle that uses transition zones, which is suitable for beginners Forex traders. Indicators in this vehicle are still used - to simplify the calculation of probability and find the necessary candles.
According to the theory of transition zones (Trancient Zones), the value of the price (quote) will be repeated again and again. The probability of this tends to infinity. At the same time, 8% of prices will be repeated over the next few candles. There is also a 10-13% chance of a new price repeat (quotation) after a few more candles. It turns out that the more candles appear to the right of the price (quotation), the higher the likelihood of a price repeat (quotation).
This strategy can be used for any currency pair (multi-currency strategy). The author of the TS tested it on the EUR / USD pair, the timeframe is 15 minutes. Trade is carried out around the clock. Download additional materials for this vehicle here.
Best for trading brokers are suitable - Alpari, RoboForex or Forex4You.
You should not trade during the release of important news, as well as some time after them, when the price is still subject to strong impulses.
Forex Trading Algorithm for Beginners “Trancient Zones”
The starting candle (bar) from which the report will be kept is called the focal candle. Each candle has a maximum and a minimum (High and Low). Suppose the next 10 candles the price rises. This means that the Low of the focal candle is below all these candles - the so-called “Unconfirmed zone”.
Using the Recurrent Statistic indicator, it is easy to calculate the probability of a price returning to a given minimum for the next 10 candles after at least it has been formed. So we can close an open deal.
For the time interval M15 of the EUR / USD currency pair, this probability is 77%, according to the indicators of the Recurrent Statistic indicator. In other words, we can expect in 77% of cases that the quote will return and the so-called An “unconfirmed zone” will turn into a confirmed zone. The probability of non-return of the price is 23%, in which case the zone will be “transitional".
Let's see the height of the so-called “Focal candle”. The distance, in points, from the minimum (Low) or maximum (High) of the focal candle to the nearest minimum / maximum of one of the previous candles, but at the distance of no more than h candles to the left of the focal candle, it is called “zone height” (h_left).
Fig. 1 clearly shows the height and length of the zone. The yellow arrow (1, 2) shows the minimum of the focal candle. In this case, the height of zone (1) is 2 points, the length is 10 candles.
If you take 10 candles on the left (the length of zone H is 10), while Low is the minimum price of this candle, which is lower than Low of the 9 previous candles, then we can say that over the next 10 candles the price will reach (return) to this minimum with probability of 70%.
After waiting for 100 candles, we will increase the probability to 92%. This means that the “unconfirmed zone” formed on the chart is transformed into a repeating one with a probability of 92%.
It turns out that it can be stated with an accuracy of 92% probability that by looking at the EUR / USD pair with an interval of M15 High or Low, which is above / below the three candles following it, this level will be reached again for 25 hours.