The first element we want to see for our simple trading strategy is that we need to see price moving into oversold territory. Any swing trading strategy that works should have this element incorporated.
Note The preferred time frame for this simple swing trading strategy is the 4h time frame, but the strategy can be used on the daily and weekly time frame as well.
Step 2 Wait for the price to Break above the Middle
After we touched the lower , we want to see confirmation that we indeed are in oversold territory and the market is about to reverse. The logical filter, in this case, is to look after a break above the middle .
This break above middle is a clear signal in the shift in market sentiment.
We at Trading Strategy Guides don’t trade breakouts without disseminating weather or that there are real buyer/sellers – in our case, buyers – behind the breakout which brings to the next step of our simple swing trading strategy.
Step 3 Swing Trading Indicator: The Breakout Candle needs to big a Big Bold Candle that closes near the High Range of the Buy at the Close of the Breakout Candle
So far our favorite swing trading indicator has correctly predicted this buy-off, but we’re going to use a very simple based method for our entry trigger. In this regard, we want to see a big bold candle that breaks above the middle .
The second element of this based method is that we need the breakout candle to close near the high range of the . This is indicative of strong buyers, which really want to drive this currency pair much higher.
Step 4 We hide our Protective Stop Loss below the Breakout Candle
The breakout candle has a lot of significance because we’ve used it in our based entry method. We assumed that this candle shows the presence of real buyers in the market. If the low of this candle were to be broken, it’s clear enough that this is simply a fake breakout as there are no real buyers.
Step 5 Take Profit once we break and close back below the middle
In this particular case we’re looking at a long trading example. So, if the price breaks back below the middle Banks it’s time to get worried and take our profits as it can signal a reversal.
The reason why we get profit here is quite easy to understand as we want to book the profits at the early sign the market is ready to roll over.
Note The above was an example of a BUY trad. Use the same rules – but in reverse – for a SELL trade.
Big 3: http://report.tradingstrategyguides.com/big-three-strategy-optin
Just looking on the candle to cross the mid BB again to see the change..
I have learned something interesting.