TRD | SBO Alligator + Candlestick engulfing

SBO Alligator + Candlestick engulfing

About strategy:

Type: Trend strategy.
Assets to trade EUR/USD, GBP/USD.
Approximate time for trading: Any.
Recommended time frame: 1M.
We use the following:
The Alligator indicator with periods 3, 5, 8.
Candlestick patterns on Japanese candlesticks.

Warning! This strategy involves concluding 2 trades with different expirations (Verified using statistical data).

The uniqueness of the strategy is in combining a trend indicator with a reversal pattern. Together, this provides an additional confirmation signal to conclude another trade, which increases the total profit.

Typically, the biggest movements occur on the most boring markets when the price of a currency is moving in a narrow range. The longer the market is at rest, the stronger and more active the trend will be.
It is during such a period of “market calm” that the trader should be ready to join the very beginning of nascent movement.

The principle of operation of the Alligator indicator.

This is an indicator for trend trading which allows you to capture the very beginning of price movement.

If these three “movings” on the chart are pressed against one other and the price of the currency pair is fluctuating around the lines, the market is in a flat.

The price does not change because there is no new information entering the market, and the previous information has already been taken into account and processed by the market.
A trend begins with the advent of new information.

Candlestick engulfing.

Engulfing consists of 2 Japanese candlesticks and it is a reversal pattern. The first candle, which should not be a doji, has a body smaller than the second candle, the body of which must engulf the body of the first. These 2 candles are most often of different colors; it depends on which direction the reversal is in.

Enter a trade UPunder the following conditions.

1
We wait for the green line to cross the red line and approach the blue line.
2
When the green line and the red line cross the blue line, trade UP.

3
We wait for the appearance of the Bearish engulfing candlestick signal.
4
After the candle closes, open the second trade UP.

Enter a trade DOWNunder the following conditions.

1
We wait for the green line to cross the red line and approach the blue line.
2
When the green line and the red line cross the blue line, trade DOWN.

3
We wait for the appearance of the Bullish engulfing candlestick signal.
4
After the candle closes, open the second trade DOWN.

All these lines, changing their initial direction and moving after the price, successively cross one another: first the green line with the red; then the green and red lines with the blue; and finally the blue line reverses. If the price crosses the Alligator lines and goes above or below those lines, this means that the market is moving into a trend. When we add a candlestick reversal pattern, we assume that the price will follow in the direction of the trend. And we perceive the candlestick model as a good rollback to the support/resistance lines, which allows us to find another good entry into a trade while observing the trend.