A very simple and profitable Trading Setup

A very simple and profitable Trading Setup 2656 1326 Minimalist Trading - Best Trading Indicators for TradingView

A very simple and profitable
Trading Setup

Our long-time traders know that we always strive for simplicity in trading the markets.

Today we couldn’t be more excited to share a very simple and profitable trading setup with the Advanced Signal Bars.

As you may know, the Advanced Signal Bars is one of the Best TradingView indicators because it’s simple to use and very adaptable to many strategies.

Today we want to keep it extremely simple!

So, let’s see how to build the setup.

The secret?

Building the setup is very easy!

All it takes is to add two indicators to your chart:

  • The Advanced Signal Bars, which is available in our suite of indicators.
  • The Moving Average, which is available for free on TradingView.

You can adjust the length of the Moving Average to be whichever better suits your trading risk, but we suggest you to keep it relatively long.

In our case, we set the Moving Average to be 54, which seems like a good compromise.

A very simple and profitable Trading Setup - Minimalist Trading

As you can immediately tell from the EURUSD 1h chart above, when the price is above the moving average, there are mostly red horizontal lines.

When, instead, the price is below the moving average, there are mostly green horizontal lines.

This is exactly what we’re looking for because we can build a simple and profitable setup based on this evidence.

So, let’s see the BUY and SELL rules of our setup.

BUY rules

  1. Price is above the moving average (54)
  2. Candle breaks up and closes above a red horizontal line

SELL rules

  1. Price is below the moving average (54)
  2. Candle breaks down and closes below a green horizontal line

Let’s now highlight the BUY and SELL conditions in the EURUSD 1h chart that we’ve seen before.

A very simple and profitable Trading Setup(commented) - Minimalist Trading

As you can see from the labels on the chart, over a 2-month period we’ve had 25 trading opportunities.

The 13 BUY opportunities came only during the uptrends, and the 12 SELL opportunities triggered exclusively during the downtrends.

If we then look closely, we can see that 24 out of 25 opportunities were profitable, allowing us to say that this simple setup was profitable 96% of the times over a 2-month period.

The only loss was the BUY opportunity number 8, which came at the very top.

Luckily though, most of the time, at market extremes we won’t get a false opportunity: consider for example what happened at the end of the first downtrend.

The price sank but at the very bottom we didn’t get any false sell opportunity 😉

Before we conclude, let us give you a few suggestions to maximize your performance.

1. Trade on long timeframes

We strongly recommend using the setup on a timeframe of 1h (like in our example) or above (e.g., 4h, 1d, …).

To day traders it might sound boring but you will be amazed by how consistently profitable the setup could be.

Moreover, you decrease your stress level by taking less but consistently profitable opportunities.

2. Use a relatively long moving average

A short moving average will often introduce noise and may trigger too many false signals.

To minimize the losses, simply increase the moving average length.

In our case, we used 54, which is a good compromise.

3. Don’t be too strict with the Stop Loss and Take Profit levels

If you set a very strict Stop Loss, you will end up losing many profitable trades.

Similarly, if you set a very strict Take Profit, you will miss out on bigger profits.

The general idea of this setup is to give space for the price to move, knowing that, most of the time, it will continue to trend in the same direction.

A rule of thumb is to set the Stop Loss before the last retracement or extreme but, of course, it comes down to your own risk-attitude to find the balance between Risk-Reward and Win-Loss ratios.

We just learned a very simple and profitable trading setup using the Advanced Signal Bars and the Moving Average.

Now it’s your turn so go ahead and start testing it yourself!

Of course, if you have any questions, don’t hesitate to contact us.