LEVELATOR Forex Trading Method – It Has About a 70% Win Ratio

In this report, we will discuss a system called the Levelator Method. We are going to use an indicator called the Levelator that will identify several levels that appear between a swing high and a swing low.
 
You can trade this method on any timeframe and on any currency pair. This also works on non-Forex charts, so if you trade Oil or Gold, you are still good.

 

System Components & Indicators

 

Timeframe:

All Timeframes

 

Currency Pairs:

All Currency pairs, preferably ones that are moving nicely and not moving sideways.

Indicators:

  1. 2ColorMA
  2. Levelator

Before we get to the charts and the system itself, you must download and install the indicators.

Chart Setup

Applying the Levelator template to your charts.

1 – Open a new chart.

2 – Click the Template Icon on the toolbar.

3 – Choose Load Template…

 

4 – Click on the Levelator template in the selection.

 

Your chart will now look like this:

 

Or maybe like this:

 

Explanation of the Indicators

 

2ColorMA:

This is the red and yellow line that runs through the price. This is the directional indicator that will tell us in what direction the market is likely to go.

  • When the 2ColorMA is red, we will be looking to sell.
  • When the 2ColorMA is yellow, we will be looking to buy.

 

Levelator Indicator:

The Levelator will give us levels in which we can:

  1. Buy or sell.
  2. Place a stop loss.
  3. Place a take profit order.

By default, the Levelator will look to identify the lowest low and the highest high over the last 100 candles and then connect them.

Once a high and a low has been identified, the Levelator will draw 6 equally spaced levels or zones between the high and the low.

If the market has been moving upwards, the zones will be colored Orange.

If the market has been moving downwards, the zones will be colored Blue.

At each line that separates the sections, you will see a yellow number. This is the number of pips the current market price is away from these levels. These numbers will continually change as the price of the market changes.

 

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Notes Before We Get Started

 

It’s important to understand that in a buy trade or a sell trade, it doesn’t matter if the Levelator is orange or blue.

Once price has moved through a zone to touch the next level, the color of that zone will disappear. You will see a lot of zones that have disappeared to leave the chart color to show through.

A Blue Levelator will have disappearing zones as the price rises upwards from the very bottom to touch the next upper levels.

An Orange Levelator will have disappearing zones as the price falls downwards from the very top to touch the next lower level.

 

Long Entry Rules

 

Long Example 1:

  1. The 2ColorMA must be yellow.
  2. The price on the chart must touch a few pips above the closest level.
  3. The Take Profit will be just below the next level above the current price.
  4. The Stop Loss will go just below the next level below the current price.

 

Long Example 2:

  1. The 2ColorMA must be yellow.
  2. The price on the chart must touch a few pips above the closest level.
  3. The Take Profit will be just below the next level above the current price.
  4. The Stop Loss will go just below the next level below the current price.

 

Short Entry Rules

 

Short Example 1:

  1. The 2ColorMA must be red.
  2. The price on the chart must touch a few pips below the closest level.
  3. The Take Profit will be just above the next level below the current price.
  4. The Stop Loss will go just above the next level above the current price.

 

Short Example 2:

  1. The 2ColorMA must be red.
  2. The price on the chart must touch a few pips below the closest level.
  3. The Take Profit will be just above the next level below the current price.
  4. The Stop Loss will go just above the next level above the current price.

 

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The Levelator will draw levels automatically based on the last 100 candles. You can change this in the properties window.

You can also have the Levelator automatically update itself for each new candle. This too can be set in the properties box. The auto-update feature is turned off by default.

To get to the properties box, first you need to open the Indicators List box. To do this, press Ctrl-I on your keyboard, or right-click on your chart and click the Indicators List option. Either way will open your indicators list box.

Chose Levelator and click Edit.

 

Under the Inputs tab, you will see the Bars Back setting. This is the Levelator look-back number. The default is set to 100 bars, but you can change that to anything you like.

The Levelator will look for the highest high and the lowest low within the last 100 candles unless you change that number.

 

Next, the AutoUpdateMainLine is set to false by default. If you set it to true, the Levelator will automatically adjust itself for every new bar that is created.

With the AutoUpdateMainLine setting remaining on false, you can manually adjust the Levelator to the highs and lows that you deem more appropriate.

Double-click on the diagonal Levelator line to select it. When the Levelator is blue, the diagonal line will be red. When the Levelator is orange, the diagonal like will be blue.

Once the line is selected, you will see a small box on the top, the bottom and in the middle of the line.

 

Now that the line is selected, you can drag the top and the bottom to the new levels you prefer.

 

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That’s all there is to it.

This is a nice little system with very defined entry and exit rules. Try it out, it has about a 60% – 70% win ratio if you are trading with the direction of the trend as determined by the 2ColorMA.

The manual features of the Levelator indicator can have you trading the levels you see fit, this aspect of the system is very customizable and will allow you to trade your way.

Best of luck to you!


4 thoughts on “LEVELATOR Forex Trading Method – It Has About a 70% Win Ratio

  • have any of you guys trialled it with any success, I will be beginning to trade it on a demo. Both good & bad reviews on it. How did you guys go with it?

  • Hi ForexWOT,
    This system looks simple, clean and easy to combine it with PA. Pls advise how to buy it with full and latest version.
    I am waiting for your feedback. Thanks for yr sharing.

  • Appreciation for covering this system.
    I’m going to try it out on a demo account to practice with. If it works out I’m going to buy the product.
    Thanks again for the share.

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