MBFX Trading Strategy
The MBFX forex trading strategy is one of the trading strategies that employ the price action system of analysis to create trading signals. Created by a 27-year veteran of forex trading, this strategy is a simple but very effective way of trading the markets.
The strategy runs on the principle of price reversals. It utilises two forex indicators to detect periods when the markets top out to create a possible selling area, and when the markets bottom out to create a region of buying. To put it very simply, the strategy tells the trader to buy when the price touches the green bars of one of the indicators, and to sell when the price touches the red bars of one of the indicators.
Top Forex Brokers UK
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Pepperstone offers ultra-competitive forex spreads averaging 0.12 pips on EUR/USD in the Razor account, accompanied by a diverse portfolio comprising 100+ currency pairs - an extensive selection surpassing most competitors. Additionally, Pepperstone distinguishes itself by offering three currency indices (USDX, EURX, JPYX), not commonly found among alternative platforms. Pepperstone has now won our annual 'Best Forex Broker' award twice.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.4 0.1 0.4 Total Assets FCA Regulated Platforms 100+ Yes MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower -
XTB provides access to 70+ currency pairs with low spreads averaging around 1 pip on majors. The xStation platform offers an intuitive environment for forex traders with an excellent charting package encompassing 30+ indicators, plus a range of order types, catering to various strategies and risk management techniques.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.4 1.0 1.4 Total Assets FCA Regulated Platforms 70+ Yes xStation -
FXCC's key selling point is its forex trading conditions. ECN spreads come in as low as 0.0 pips during peak trading hours, while it supports a wider range of currency pairs than the majority of rivals with over 70 forex assets. Additionally, you have access to MT4, which was built specifically for forex trading and excels for its charting tools.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.0 0.2 0.5 Total Assets FCA Regulated Platforms 70+ No MT4, MT5 -
Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.5 0.0 0.5 Total Assets FCA Regulated Platforms 55+ Yes ProTrader, MT4, MT5, TradingView, DupliTrade -
IC Markets maintains its commitment to providing exceptionally tight 0.0-pip forex spreads on major currency pairs such as EUR/USD. This makes it an excellent option if you are seeking superior execution, with an average of 35 milliseconds. Additionally, if you are a high-volume trader, you can benefit from rebates of up to $2.50 per forex lot.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.23 0.02 0.27 Total Assets FCA Regulated Platforms 75 No MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower -
FxPro offers 70+ currency pairs but no minors and stands out with its ultra-fast execution speeds and tight spreads averaging 0.45 pips on EUR/USD. Forex traders can also build test and deploy short-term trading strategies on the industry-leading MT4 software, with expert advisors (EAs) for algo trading.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.6 0.45 0.73 Total Assets FCA Regulated Platforms 70+ Yes FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower -
IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.9 0.8 0.9 Total Assets FCA Regulated Platforms 80+ Yes Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime -
FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.3 1.2 1.4 Total Assets FCA Regulated Platforms 80+ Yes MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral -
Eightcap offers 50+ currency pairs in line with the industry average but trailing category leaders like CMC Markets with its 300+ currency pairs. However, Eightcap stands out with institutional-level spreads from 0.0 pips on major pairs like the EUR/USD, alongside low $3.50/side commissions. The broker also offers rich forex data to inform trading decisions, including key fundamentals, bullish/bearish indicators and a calendar that tracks key events in the foreign exchange market.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.1 0.0 0.1 Total Assets FCA Regulated Platforms 50+ Yes MT4, MT5, TradingView -
PrimeXBT offers forex trading on over 50 majors, minors and exotics with margin opportunities and zero commissions. The forex platform is fast, reliable and feature-rich based on our latest tests with 3 charts, 10 timeframes, and 91 technical studies - ideal for active trading strategies.
GBPUSD Spread EURUSD Spread GBPEUR Spread Variable 0.1 Variable Total Assets FCA Regulated Platforms 45+ No Own
Indicators
The MBFX trading system utilises two indicators namely:
1) Currency meter
2) MBFX Timing Indicator
The currency meter is used to detect which currencies are suitable for trading. Generally speaking, this strategy suits trending currencies very well. When using the currency meter to test the suitability of a currency for trading with the MBFX strategy, check to see if the price action of the currency is able to get to both extremes of movement, as depicted by the bars of the currency meter. These bars are red on top, green below and blue in the middle. If a currency is able to achieve this, then it can be traded with the MBFX strategy.
The MBFX Timing Indicator is the cornerstone of the strategy. It appears in an indicator window under the currency asset chart. It works by changing colours like the lights at a traffic stop. It turns from green to yellow to red as the price of the asset moves from the oversold to overbought zones, and from red to yellow to green as price moves from the oversold zones to overbought zones. These colour changes serve as the signal to the trader to pull the trigger. We will discuss how to take trades using the colour changes later in the article.
Time Frames
This strategy can be used to trade short, medium and long term time frames. If you are a scalper, then you will find this system useful in picking out points at which sell and buy scalps can be done with greater accuracy than most systems around. The 1 minute chart is the time frame for the scalpers.
If you are a day trader, then the 30 minute and hourly charts are there for you.
However, the 4hour and daily charts serve as the charts of choice, with trading accuracy approaching 98% and of course, with more profits to pull in due to the wide range of price on these charts.
Entry Rules for Long Trades
The trader should go long when these two parameters are satisfied:
1) Price action candle has kissed or cut the green curved lines on the chart.
2) The MBFX Timing indicator has changed colour from red to yellow, or from yellow to green.
Entry Rules for Short Trades
The trader should go short when these two parameters are satisfied:
1) The price action candle has kissed or cut the red curved lines on the chart.
2) The Timing indicator has changed colour from green to yellow or from yellow to red.
In this strategy, there is no room for impatience. The trader must wait for the price action candles to do their job, and then enter the trades at the open of the next candle.
Here’s a note of caution to traders. The real success behind the system is in using money management for all trades. The MBFX trading strategy employs a 2:1 profit to risk ratio, which means that even if a trader has an equal number of winning and losing trades, the trader will still make money. Problems only arise when all money management rules are thrown out of the window, so that disproportionate exposure to the market now tilts the profit to risk ratio markedly in favour of risk, meaning that a lesser number of losers is required to offset the greater number of trade winners. This is a situation the trader must avoid at all cost.
The beauty of this system is that unlike most other systems that use the price action method of analysis, the blue line on the chart serves as the profit target for all trades, whether buy or sell. This gives the trader a clear visual depiction of what needs to be done in terms of profit potential.
The entire MBFX strategy is commercially sold and comes with the complete suite of indicators. The trader should try as much as possible to use this system first on demo, and then on a small volume live account such as the no-deposit account which provides real market conditions at zero risk to the trader.