Forex Ribbon System

Forex Ribbon system is a trend following strategies based on guppy of moving averages filtered by a momentum indicator the Commodity Channel Index.

It is composed of two main indicators:

1. Ribbon

2. CCI 

The Ribbon is a seires of 7 moving averages, each one shifted 1 period farther than the

previous. It will be the way we determine whether we take a trade or not. In order for a long

trade, price must close above the ribbon. For a short trade, price must close below the ribbon.

The CCI is composed of 2 parts:

The CCI Histogram which is the red and blue bars.

The CCI Signal Line which is the green line that runs through the histogram.

Ribbon Signals

When the Ribbon gives off a signal, it can be at the close of a candle above or below the

Ribbon itself.

The first candle close above the Ribbon is a signal to go long.
The first candle close below the Ribbon is a signal to go short.

Direction of the market for trading

We will be guided by the CCI Histogram to tell us what direction to trade.

When the CCI Histogram is blue, we will only be looking to take long trades.

When the CCI Histogram is red, we will only be looking to take short trades.

Filtering

The Ribbon is our main signal generator, but we use the CCI Histogram as our filter

mechanism. Not every signal generated by the Ribbon is going to be a good signal. There are

times when the market is choppy and could use the assistance of a filter to help weed out

some of the bad trades.

This is where the CCI Histogram comes into play.

In periods where the market has closed below the Ribbon, we could see a signal for a short

trade, but if the CCI Histogram does not agree by turning red, then we cannot take the trade.

Trading rules Forex Ribbon System

Ribbon Long Trade

Setup

Price must be below the Ribbon.

CCI Histogram can be either blue or red.

Signal

Candle must close above the Ribbon.

CCI Histogram must be blue.

Stop Loss

Place initial stop loss below the Ribbon of the signal candle.

If the Ribbon is flat, you can place stop below recent swing low of the price.

Target

Place your target the same distance as the stop loss.

Exit

Close the trade if price closes back inside, or below, the Ribbon.

Ribbon Short Trade

Setup

Price must be above the Ribbon.

CCI Histogram can be either blue or red.

Signal

Candle must close below the Ribbon.

CCI Histogram must be red.

Stop Loss

Place your initial stop loss above the Ribbon of the signal candle.

If the Ribbon is flat, you can place stop above recent swing high of the price.

Target

Place the target the same distance as the stop loss.

Exit
Close the trade if price closes back inside, or above, the Ribbon.

CCI Signal Line Long Trade

Setup

• CCI Histogram must be blue.

Signal Line must be below the CCI zero line.

Signal

Signal Line must close above the zero line.

Candle must close above Ribbon.

Stop Loss

Place the initial stop loss below the Ribbon of the signal candle.

If the Ribbon is flat, you can place the stop below the recent swing low of the price.

Target

Place your target the same distance as the stop loss.

Early Exit

Close the trade if price closes back inside, or below, the Ribbon. 

CCI Signal Line Short Trade

Setup

CCI Histogram must be red.

Signal Line must be above the CCI zero line.

Signal

Signal Line must close below the zero line.

Candle must close below the Ribbon.

Stop Loss

Place the initial stop loss above the Ribbon of the signal candle.

If the Ribbon is flat, you can place the stop above the recent swing high of the price.

Target

Place your target the same distance as the stop loss.

Early Exit
Close the trade if price closes back inside, or above, the Ribbon.

 Download Forex Ribbon System indicators and template MT4