The Trio strategy
Description
The Trio strategy is a forex day trading strategy. It was developed and described by the German trader Wilhelm Eder in the Traders’ magazine in 2012. Trio is a simple strategy based on a judicial combination of three technical analysis indicators.
These are advantages of the Trio strategy:
- Developed by a well-known trader.
- Simple and easy to understand.
- Made for Forex day trading.
| Suitable for | : Forex (EUR/USD, GBP/USD...) |
| Instruments | : Futures and CFD-Forex |
| Trading type | : Day trading |
| Trading tempo | : depends on time frame |
| Using NanoTrader | : Manual or (semi-)automatic |
When to open a position?
This strategy is a day trading strategy for forex. It can be used on 1-, 5-, 10- and 15-minute charts.
The Trio strategy combines three of the most well-known indicators in technical analysis: the Bollinger Bands, the MACD and the RSI. All three indicators must have the same opinion for a signal to occur.
The most important indicator in the trio is the Bollinger Band. They are also used to determine the direction of the trend. If the lower Bollinger band moves downwards the trend is bearish. If the upper Bollinger band is moving upwards the trend is bullish.
This example shows a buy signal. The upper edge of the Bollinger Band is moving up. The trend is therefore positive. The three indicators are all bullish. The price touches the upper edge of the Bollinger Band, and a position is opened at the market price.
This example shows a short sell signal. The lower edge of the Bollinger Band is moving down. The trend is therefore negative. The three indicators are all bearish. The price touches the lower edge of the Bollinger Band, and a short sell position is opened at the market price.
When to close a position?
The Trio strategy uses a trend reversal of the Bollinger Bands and an optional stop loss to protect and to close the position. A long position is closed if the upper Bollinger Band starts to move sideways or goes down. A short sell position is closed if the lower Bollinger Band starts to move sideways or goes up. The optional stop loss is placed at a distance of approximately 15 pips depending on the trader’s chosen time frame.
This example shows a buy signal (green background) and the stop loss (red horizontal line). A position was opened at the market price when the price touched the upper Bollinger Band and all three indicators were bullish. The position was closed with a profit, after the upper Bollinger Band stopped moving upwards.
This example shows the short sell signal (red background) and the stop loss (red horizontal line). A position was opened at the market price when the price touched the lower Bollinger Band and all other criteria were met. The position was closed with a small loss by the stop loss order… just before the market dropped. These things happen in trading.
Practical implementation
Using the NanoTrader follow these steps:
- Open the chart of the instrument you want to trade.
- Select the template study "WHS Trio” in the "WHS Strategies" folder.
- For semi-automated trading, activate TradeGuard+AutoOrder
in the chart. For automated trading, activate AutoOrder in
the chart.