TMT (Trend-Momentum-Trendline) is a trend scalping trading system based on a set of trend indicators and oscillators. It is developed for MetaTrader 4 for working on short timeframes. The system is founded on a trendline breakthrough in the direction of trend and market momentum. That increases the possibility to enter the market in favour of successful trend breaks.
TMT is created for active day traders or scalpers. It is recommended to work during the European and American sessions, as the high volatility is observed in the market. Transactions are better to open in the direction of the D1 daily candle.
The authors recommend using the strategy for short-term trading on M5-M15 timeframes within one trading day. You can use any currency pairs, but it is better to focus on majors.
As always, you should practice this trading system on a demo account before using it on real ones. You can open a demo account at JustForex and try out this trading strategy.
TMT system indicators
Below you can see how all the tools necessary for work on the TMT system are visually presented. When the TMT trading system is correctly installed, your price chart will look like:
The strategy uses a series of modified technical indicators, including:
- Two EMA moving averages with periods of 20 and 7. They determine the direction of the local trend within a day;
- Two oscillators: MFI (Money Flow Index), which takes into account tick volume and RSI.
EMA moving averages are located on the price chart, while MFI and RSI are displayed in the window under the chart.
Also on the chart, the daily candle is displayed, which shows the current direction of the trend at D1 timeframe, as well as the support and resistance levels of higher timeframes. They allow the trader to more accurately set stop losses and take profits. The indicators and templates in the strategy are custom, so you need to download and install them in the MT4 terminal.
The principle of working with “TMT System”
Like any other trading system, this scalping strategy is also subject to a specific algorithm. According to the results of this algorithm, traders search for signals to enter positions.
Trading signals are determined by indicators and the trend line of the price channel used as an additional signal filter.
Conditions for entering short:
- The daily candle is red;
- A red bar has been formed on the RSI;
- A pink bar has been formed on the MFI Meter;
- 7 EMA is below 20 EMA – downtrend;
- The price pullback inside 7 and 20 EMA.
If all these conditions are met, then you can search for an entry point to sell. It is also necessary to draw a trend line. When the price breaks the line from top to bottom and fixes under it, it will be the entry point to the market.
Conditions for entering long:
- The daily candle is green;
- A blue bar has been formed on the RSI;
- A blue bar has been formed on the MFI Meter;
- 7 EMA is above 20 EMA – uptrend;
- The price pullback inside 7 and 20 EMA.
When these conditions are met, draw a trend line from the highest maximum and wait for its breakdown.
Do not forget about the risk/reward ratio. According to the recommendations of this strategy, the ratio of Stop Loss and Take Profit is 1:1. This means that if you set the Stop Loss of 10 points, then Take Profit should correspond to the same value. The recommended stop-loss is 10-20 pips.
Scalping strategies are becoming more trendy day by day. Knowing different approaches to scalping, traders can choose the most appropriate one for successful trading activity. But it’s highly important your Forex Broker includes it. There are number of companies that has no restrictions to trading strategies. A good example of such Forex Broker is JustForex.
