A high probability system for MT4 is a trading strategy that identifies the most probable trades by analyzing data and verifying it at multiple time frames. This trading system’s profit target is generally 50-80 pips at different trade setups. Therefore, you can consider it as a reliable method to earn money from intraday moves.
Let’s have a look at how this trading strategy works in both bearish and bullish market scenarios.
Elements of the high probability system
This trading system is based on some necessary calculations and a straightforward applicable strategy that suggests the user’s high probable trade.
List of tools/indicators used in this system:
- ZigZag
- Non-lag_ma
- Non-lag ZigZag
- ZigZag pointer
- Stochastics: setting 14,3,3
- Daily Average Range: signal bars v3 daily
- FiboPivot
In the image above, we can see how the chart looks after implementing all trading tools.
Explanation of trading tools
ZigZag
The first trading element is the ZigZag that defines the highs and lows during the movement. It is used uniquely to determine the tops and bottoms of price movement in this trading system. In other words, this tool identifies the price shifting points at different time frames. Although many people avoid it for its lagging nature, it is a valuable tool when optimized in several settings.
Non-lag ZigZag
This strategy uses two types of non-lag ZigZag indicator, in which non-lag_ma changes color with the price movement. It is like a regular ZigZag with different settings to filter out false highs and lows. Moreover, the non-lag ZigZag used in this system draws a white ZigZag line with an additional reading than the traditional ZigZag.
The ZigZag pointer
It corroborates the non-lag ZigZag data and indicates entry points by making a yellow or buy arrow below swing lows and a red or sell arrow above swing highs.
Stochastics
After that, we will focus on stochastics to identify the bullish or bearish condition and oversold and overbought areas for the currency pair. This indicator is also used in this system to verify the highs and lows shown by ZigZag.
Daily average range
An indicator shows the daily candle information or the price movement’s daily range.
FiboPivot
It shows the daily pivot, support, and resistance levels.
Let’s see what the chart looks like after plotting all these indicators. This trading system sends notifications if the price starts to change direction or at a probable entry zone.
Bullish trading strategy
This strategy can trade all high volatile pairs by the recommended pairs will be:
- GBP/USD, GBP/JPY, EUR/JPY, EUR/USD, USD/JPY, GBP/CHF
- Recommended time frames (TF): 30-min 1-hour 4-hour daily
After all the indicators/features align themselves at all 4TF recommended by this system, then verify the rules carefully before placing a buy order.
Bullish trading conditions
- The ZigZag pointer yellow or buy arrow appears below candles in the 30-min TF.
- Check the 1-hour chart and confirm that the yellow arrow appeared or direction is the same as the 30-min chart.
- Also, look at the 4-hr TF to ensure the chart reading of 1-hour and 30-min remains the same or different.
- The stochastic reading must be in the oversold area in all time frames.
- Observe the daily chart to verify the trade’s nature.
- Then observe the support-resistance level and find the price moving from any support or resistance levels.
The above chart shows a possible buy setup at the 1-hour chart. We can generate three types of trading signals based on different setups or observations of this trading system. Risk-ratio and entry/exits are also other at each one of them.
High probability trades
Trade becomes highly probable when three TFs: 30-min, 1-hr, and 4-hr charts agree to the same direction.
Stochastic reading remains at the oversold area at every time frame, then place a buy order for 50 pips profit target and set stop loss below 30 pips of the entry. For these pairs, the profit will be 70 pips and SL 50 pips.
Extreme high probability trades
When all four TFs: 30-min, 1-hr, 4-hr, and daily charts agree to the downward direction, and stochastic reading remains at the overbought area, place a sell order for 100 pips profit target and set a stop loss above 85 pips of the entry.
Low probability trades
When only two TFs: 30-min and 1-hr charts agree to the upward direction, and stochastic reading remains at the oversold area at every time frame, place a buy order for 30 pips profit target and set stop loss below 20 pips of the entry.
Bearish trading strategy
This strategy can trade all high volatile pairs by the recommended pairs will be:
- GBP/USD, GBP/JPY, EUR/JPY, EUR/USD, USD/JPY, GBP/CHF
- Recommended time frames: 30-min 1-hour, 4-hour daily
After all the indicators/features align themselves at all four time frames recommended by this system, verify the rules carefully before placing a sell order.
Bearish trading conditions
- The ZigZag pointer red arrow appears above candles in the 30-min TF.
- Check the 1-hour chart and confirm that the red arrow appeared or direction is the same as the 30-min chart.
- Also, look at the 4-hr TF to ensure the chart reading of 1-hour and 30-min remains the same or different.
- The stochastic reading must be in the overbought area in all time frames.
- Observe the daily chart to verify the nature of the trade.
- Then observe the support-resistance level.
The above chart shows a possible sell setup by this trading system.
Three types of trading signals can be generated based on different setups or observations of this trading system. Risk-ratio and entry/exits are also other at each one of them.
High probability trades
When the three TFs: 30-min, 1-hr, and 4-hr charts agree to the downward direction, and stochastic reading remains at the overbought area at every time frame, place a sell order for 50 pips profit target and set stop loss above 30 pips of the entry. For these pairs, TP will be 70 pips and SL 50 pips.
Extreme high probability trades
When all four TFs: 30-min, 1-hr, 4-hr, and daily charts agree to the downward direction, and stochastic reading remains at the overbought area, place a sell order for 100 pips profit target and set a stop loss above 85 pips of the entry.
Low probability trades
When only two TFs: 30-min and 1-hr charts agree to the same direction, and stochastic reading remains at the overbought area at every time frame, then place a sell order for 30 pips profit target and set stop loss above 20 pips of the entry.
Final thoughts
It’s better to use this strategy to take entry at the trades with high probability because big-time plays to be safer than the other two signal systems of this trading method. Moreover, investors should follow an appropriate money management system to minimize unexpected risks.
