Hey good people...
When I first saw this indicator, it reminded me a bit of a inside bar strategy outlined in one of Kathy Lien's books.
The rules are like this:
Long
- Identify a currency pair where the daily range has been contained within the prior day’s range for at least two days (we are looking for multiple inside days).
- Buy 10 pips above the high of the previous inside day.
- Place a stop and reverse order for two lots at least 10 pips below the
low of the nearest inside day.
- Take profit when prices reach double the amount risked or begin to trail the stop at that level.
Protect against false breakouts: If the stop and reverse order is triggered, place a stop at least 10 pips
above the high of the nearest inside day and protect any profits larger than what you risked with a trailing stop.
Short
- Identify a currency pair where the daily range has been contained within the prior day’s range for at least two days (we are looking for multiple inside days).
- Sell 10 pips below the low of the previous inside day.
- Place a stop and reverse order for two lots at least 10 pips above the
high of the nearest inside day.
I'm thinking very similar strategy rules could be used for the Blast Off indicator by simply replacing the two inside bars with the Blast Off bar from the indicator. The strategy from Kathy Lien is focused on fx, but I think it could be used in other markets. I haven't done any backtesting and currently don't have the time. It would be super cool if someone could code this up for MT5...
The nice feature of the above strategy is the stop and reverse order. Looking quickly over some charts with the Blast Off indicator, it looks like it has potential to be a profitable strategy.