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Metro Hull Reversal Forex Trading Strategy

Many new traders experience beginner's luck. They will try to dip their toe in forex market trading and luckily they will have a good number of trades on their first day trading their demo account. Then they came back the next day and made another good trade. Then the same thing happened the next day. So you will start to believe that forex trading is easy money. So they open a real account and guess what, their luck is over. They suffer losses and swear that the forex market or broker is playing with them.

However, experienced traders know that this is all part of the game. Withdrawals do happen. The real test of a trader is how well they get through this period and are ready to catch the next set of good trades. Experienced traders know that trading is all about probability. Traders who win more than lose or win more than lose can benefit from the forex market in the long run.

One of the best ways to increase probabilities when trading the forex market is to look for confluences. This is a point in the market where several conditions show the same directional deviation or reversal signal.

Metro Hull Reversal Forex Trading Strategy is a strategy that revolves around this concept. It trades on a confluence derived from several complementary indicators.

METRO indicator

The METRO indicator is a specialized technical indicator that helps traders spot directional trend alignment as well as potential trend reversal based on the underlying Relative Strength Index (RSI).

The METRO indicator draws three lines. The orange line is the base RSI line. The sky blue and magenta lines are also derived from the RSI line, but have ladder-like characteristics. The sky blue line moves faster than the magenta line.

The direction of the trend or bias is based on how these three lines interact. Generally, if the RSI line is above the magenta line while the sky blue line remains above the magenta line, the market has a bullish bias. On the other hand, when the RSI line is generally below the magenta line while the sky blue line is below the magenta line, the market has a bearish bias.

The cross between the three lines indicates a trend reversal. The RSI line and the sky blue line crossing above the magenta line indicate a potential bullish reversal. On the contrary, the RSI line and the sky blue line crossing below the magenta line indicate a possible bearish reversal.

stomach trend

The Hull Trend Indicator is another specialized technical indicator that shows short-term trend and momentum.

The Hull Trend indicator is based on the Hull Moving Average (HMA). Most moving averages are too slow and too susceptible to false signals from troubled markets. The Hull Moving Average is a modified moving average that places more emphasis on recent price action, making its moving average line more characteristically responsive to price action while remaining very smooth.
The Hull trend indicator, on the other hand, is not a moving average indicator. Instead, it covered the price action with bars. These bars change color depending on the trend they detect from the underlying HMA line. Blue bars indicate bullish momentum, while red bars indicate bearish momentum.

trading strategy

This trading strategy is a trend reversal strategy that offers trading configurations based on price action crosses and 50 period exponential moving average (EMA) lines. However, it also takes advantage of the confluence of the METRO indicator and the Hull trend indicator.

First, we monitor the market for a strong cross between the price action and the 50 EMA line.

Then we also observe the METRO indicator when the sky blue line also remains to the side of the magenta line, which confirms the direction of the new trend.

We then have to wait for the price to retest the 50 EMA line and then reject it.

The trigger or confirmation of the last entry will be the confluence of the RSI line crossing the sky blue line in the direction of the trend and the change in color of the Hull trend bar.