QQE Indicator Strategy for MetaTrader 4

QQE stands for Qualitative Quantitative Estimation. The idea behind this strategy is to trade based on the agreement of the intermediate or long-term trend and the short-term trend signal as provided by the QQE indicator.


For our intermediate or long-term trend, we will be using the commonly used 100 Exponential Moving Average (EMA). This moving average parameter is popular among traders and because of that, many traders look at it for guidance as to the direction of their trades. By trading on the same direction as the bulk of the market, we increase our chances of having profitable trades.

As long as price is above the 100 EMA, we will only be taking buy trades. If price is below the 100 EMA, then we will only be taking sell trades.

As for our short-term trend signal, this will be determined by the location of the QQE in relation to its midline, which is 50. However, it wouldn’t be wise to be taking just about any buy trade when QQE is above 50 or sell anytime the QQE is below 50. We just don’t know when price might reverse especially when the short-term trend has run for quite some time and may already be overextended. Instead, we will be trading only when the QQE crosses 50 in the direction of the long-term trend based on the 100 EMA.

Buy Trade Setup

Entry

  • 100 EMA (green): price should be above the 100 EMA
  • Enter a buy market order as soon as the QQE crosses above 50

Stop Loss

  • Set the stop loss at the fractal below the entry price

Take Profit

  • Set the take profit target at 2x the risk on the stop loss

As you would notice, price had been staying above the 100 EMA indicating that the market is in an intermediate to long-term uptrend. Then it started to retrace back to the mean, which is the 100 EMA. This retracement caused the QQE to drop below 50. Then, as price touched the 100 EMA, price bounced back causing the QQE to cross above 50. This bounce of the 100 EMA causing a cross above QQE 50 will be a common occurrence in this strategy. As the QQE crossed 50, we enter the trade, then the rest is history. You would be noticing another setup several candles after this trade setup which should also be in profit. The same bounce also caused QQE to cross above 50.

Sell Trade Setup

Entry

  • 100 EMA (green): price should be below the 100 EMA
  • Enter a sell market order as soon as the QQE crosses below 50

Stop Loss

  • Set the stop loss at the fractal above the entry price

Take Profit

  • Set the take profit target at 2x the risk on the stop loss

Again, this chart shows almost the same setup, only that this time it is on the 1-hour timeframe. The same process occurred. Price retraced to the 100 EMA causing the QQE to rise above 50, then as soon as price bounced off the 100 EMA, QQE crossed below 50 confirming the resumption of the trend on the short-term. Another retrace occurred after this setup, only that it didn’t quite touched the 100 EMA, still price dropped and would have also returned a profit.

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