In today’s review, we will consider another scalping strategy, the name of which is Futunachi. Remember that this overview is not a “guide to action”. To trade on a new strategy for you on a real account without training and careful study of the algorithm of its operation means putting your capital at risk.
Nothing is known about the author of this strategy. On the forums of specialized sites, you can find enough information regarding its work and effectiveness. By the way, the same forums note the high efficiency of “Futunachi” when trading on the “watch”. Agree that scalping on H1 sounds strange.
Scalping is, first of all, a quick “entry” into a trade and the same quick “exit” from it, albeit with a very small profit. Hourly TF is more used in short-term trading. Since “Futunachi” is presented as a scalping strategy, we will consider it in this format. It is considered trend and works with filters to filter out flat movement
Tools TS “Futunachi”
Unlike “Sniper”, the strategy we are considering consists of 5 indicators. These are copyright tools that can be downloaded from the Internet in one template. Let’s find out in more detail what these instruments are, how they are called and what signals they should send to the trader. We will add them to the graph sequentially as we study.
1) Indicator “AutoFib TradeZones”
This indicator works with Fibonacci levels by automatically drawing them on the chart. This indicator has two special zones:
- between the levels 76.4 and 100 lies the “red zone” or “sell zone”.
- between the levels 23.6 and 0 there is a “blue zone” or “buy zone”.
The tool paints both of these zones in the colors corresponding to their names.
AutoFib TradeZones signals:
- the price is in the red zone – we are considering the possibility of entering by selling;
- the price lies in the blue zone – this is the area for searching for a buy entry.
2) Indicator “100pips Momentum”
This instrument is represented on the chart as two moving averages. One curve is colored yellow, the other curve is green. Of all the settings of this indicator, a trader can only change the color of its moving averages.
100pips Momentum signals:
- the green curve crosses the yellow curve upwards – we enter with a purchase;
- the green curve crosses the yellow line from top to bottom – this is a sell signal.
3) “Elliot oscillator – waves 1.02” indicator
This tool occupies a separate window on the chart. Visually, it is presented in the form of a histogram colored in red (selling area) and blue (buying area). In addition, in each such zone, you can see the drawing of one single yellow vertical line.
Its appearance in the histogram warns the trader about the likelihood of an imminent trend reversal. The histogram will change its color and the direction of the vertical lines, and the trader will need to look for a possible entry to open the opposite position.
Elliot oscillator signals – waves 1.02:
- red histogram – considering a possible sale;
- blue histogram – looking for a buy entry;
- the appearance of a yellow vertical line in the histogram is a quick change in the market trend.
Another indicator, Trix4Kids, should be installed in the window of this indicator as an auxiliary tool.
4) “Trix4Kids” indicator
In the oscillator window Elliot oscillator – waves 1.02, this instrument is represented by two moving slides – a thin and a thick curve, segmented in red and green.
- a thin red line crosses the thick red curve from top to bottom – looking for an opportunity to sell;
- a thin green line crosses a thick green curve upwards – we are considering buying.
It should be noted that in tandem with the Elliot Oscillator, this tool is very helpful to the trader in graphical analysis of price action.
5) “TSV RenkoFX” indicator
On the chart, this instrument is also located in a separate window and is presented as a histogram of red (sell area) and green (buy area).
TSV RenkoFX signals:
- green histogram – we are considering buying;
- red histogram – looking for sales options.
Trading conditions for “Futunachi”
So, all indicators are installed and configured to work. How to work with this strategy? Under what conditions it is possible to trade on “Futunachi”, we will now find out:
- The time period is (H1).
- Currency instrument – EUR / USD.
- Entering the market – only after receiving signals from all indicators, where each new signal confirms the previous one.
- Stop Loss – here we have a small problem setting it. The fact is that according to the terms of this strategy, Stop Loss must be set:
- beyond the upper border of the red zone when entering with a sale.
- for the lower border of the blue zone, if we enter with a purchase.
In practice, when the price moves towards one of these zones, the AutoFib TradeZones indicator automatically draws the Fibonacci lines. In this case, its colored zones are also traced – (76.4 and 100), (23.6 and 0). The Stop Loss level is also automatically moved.
- Exit from the market – how to close a position, there are no strict rules for that, we can say that these rules, as such, do not exist at all. Let’s now consider the possible options for exiting the market:
- On the one hand, if we take into account that we are considering a scalping strategy, and even on the H1 timeframe, it is not in our interests to sit on the scalping position for a long time. Drawing 2-3 candles is enough to close the position with a profit.
- You can exit a trade after signals to open an opposite position are received from all indicators.
- It is also possible to exit by Trailing Stop with its subsequent pulling up if the price moves in the direction we need. This method allows you to accompany a potentially profitable transaction for several hours.
- Close by Take Profit is one of the options for exiting the market, but with a fixed profit. True, here you can also revise its parameters, postpone or completely cancel.
- In the most extreme case, each trade can be closed at breakeven.
As you can see, without clear rules for closing positions, a trader still has several ways to take profit.
Trading signals “Futunachi”
The algorithm of this strategy, despite the abundance of indicators in its basis, is quite simple.
- Determine the position of the current price relative to the zones of the AutoFib TradeZones indicator. In this case, we are only interested in the red zone – we are looking for signals to enter a sell. Next, we monitor the signals of other indicators according to the principle: each new signal confirms the previous signal.
- 100pips Momentum – on the chart, the green line crossed the yellow curve from top to bottom.
- The presence of a yellow vertical line on the Trix4Kids histogram previously signaled to us about a possible trend change – which we are now seeing.
- On Trix4Kids, the thin red line crosses the bold red line from top to bottom.
- In the TSV RenkoFX indicator window, we see the current red histogram.
- Determine the position of the current price relative to the zones of the AutoFib TradeZones indicator. Here we are interested in the blue zone – we are looking for buy signals.
- 100pips Momentum – on the chart, the green curve crosses the yellow curve upwards.
- Earlier, a vertical yellow line appeared on the red histogram of Trix4Kids – a sign of an imminent trend change.
- On Trix4Kids, a thin green line crosses the bold green curve from bottom to top.
- TSV RenkoFX we see a green histogram plotting.
If the price lies between the colored areas of the AutoFib TradeZones indicator, despite the fact that all indicators have received correct entry signals, then you can open the corresponding position. For some reason, this strategy considers the “interzone” as a flat, although good entry signals are generated by the indicators. Note that the most correct entry will be the one that was made using signals that lie almost on the same vertical.
Advantages and disadvantages of TS “Futunachi”
During testing of this strategy, both positive and negative aspects of it were identified.
- Its obvious advantages include the following factors:
- A high percentage of making a profit on trades when entering for all signals.
- Good filtering of signals by indicators, although they are rarely received on the “watch”.
- The Elliot oscillator and Trix4Kids indicators provide very high quality signals.
- The disadvantages of this vehicle are:
- On the “watch” all the necessary input signals are not often received.
- It is extremely rare that all signals are generated simultaneously. Testing has shown that even in such a situation, you can open a position and take a good profit.
- The AutoFib TradeZones indicator does not work very well. It is not uncommon on the chart when the price starts to move confidently towards one of its colored areas. At this time, opposite signals are received from other indicators. It would be possible to open a position using these signals, but the rules of this TS do not provide for such entries. For this reason, the opportunity to make money on good trades is missed.
During testing, the Futunachi strategy showed good results for short and medium-term trading. The signal recognition process is not complicated, the signals are clear and a substantial proportion of deals on them are closed with a good profit. Signals from the AutoFib TradeZones indicator are somewhat inconvenient, therefore, when opening positions, it is better to give priority to signals from other indicators of this TS. The conditions for closing deals are a little unclear, but experienced traders can easily figure out how to close positions and which method will be convenient for each specific deal.