What is The White Ladder System
The White Ladder is composed of four indicators: two Simple Moving Averages (SMA), a William% R, and a Moving Average Convergence Divergence (MACD). The responsibility of the system is to identify trading opportunities from corrections in the market’s trends. Two mid-term SMAs works alongside with the main function to highlight trending conditions and ascertain possible entries. Meanwhile, the William% R and the MACD works as momentum measurers, enabling chartists to determine when pullbacks are likely to end, resulting in trend’s resumption.
The detailed setting of the system is as follows:
- A 50-day Simple Moving Averages;
- A 200-day Simple Moving Averages;
- A 14-day William% R;
- A default Moving Average Convergence Divergence (12-26-9).
The White Ladder System based on one of popular candle formations, which indicates about uncertainty on the market.
From October 2016 to October 2017, the White Ladder has generated more than 2500 pips with a quite impressitive win ratio: 82.12%. Furthermore, what makes the White Ladder favorite is its comprehension as this system could be applied to any trading time frames and currency pairs. However, longer time frames generate higher-probability signals according to the testing result; therefore, we suggest using it at least on the 1-hour chart or above.
Let’s review some practical examples to see how this technical strategy works.
How to use the White Ladder in Forex trading
A bullish signal is defined when the following conditions are satisfied:
- Price remains above both the SMA 50 and SMA 200;
- The William% R turns above -80;
- The MACD histogram crosses above the zero level from the bottom.
On the contrary, a bearish signal is presented when the following requirements are met:
- Price remains below both the SMA 50 and SMA 200;
- The William% R turns below -20;
- The MACD histogram crosses below the zero level from the top.
Below are some important rules when using this strategy:
- Only one position should be opened at a time;
- No trading decisions are implemented until the candle of confirmation is fully closed;
- Transactions should only be made when the distance between the SMA 50 and SMA 200 remains wide. You better avoid choppy market conditions;
- The stop-loss is set of 30 pips (if you trade on the 1-hour chart). You should move the stop-loss to breakeven when prices go about 30 pips in the expected direction;
- The take-profit should be two or three time greater than the stop-loss;
- The maximum risk for each transaction shouldn’t be more than 3% of your total balance.
Pros and cons of the strategy
- Enables you to spot and follow reliable mid-term trends;
- Offers clearly defined settings;
- Simple, easy-to-use, all-purpoe;
- Very flexible and comprehensive;
- Engenders high-probability trading opportunities.
- Requires a high level of patience;
- Necessitates you to constantly observe the trading platform to spot trading opportunities.
If you like this strategy, you might also be interested in this Bollinger Bands Strategy Forex
The White Ladder is an effective trend-chasing system that offers traders excellent levels of entry into the market with clearly defined settings. It’s highly suitable for mid-term traders and could be used on any currency pairs and trading time frames. Given a right approach in addition to tight money and psychology managing methods, we believe this system will be one of your greatest companions, which can help you earn substantial profits in the long run.