What do you really need, to find the best entry within trend in forex? The answer is, end of correction going against the trend. If you enter just at the end of the correction you are in great position to ride the trend.
This forex strategy uses sloping trendlines drawing to identify correction (minor trend) within major trend. Trendline drawing is also used for stop loss and take profit calculation. Additional forex indicator MA (moving average) helps us to separate downtrend from uptrend. To understand wave nature of forex learn more about Elliot waves and fractal character of Elliot waves.
Rules of the forex strategy
We choose any major currency pair with proffered timeframe 15 min – 4 hours.
We plot SMA 200 (Smoothed moving average) in the chart.
For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.
Sell order:
Price trending below SMA 200 (downtrend).
We connect three lows in the correction, creating upwards sloping support trendline (sloping in the opposite direction against the trend).
Angle of the slope is irrelevant, same as upper (resistance) trendline. Therefore, forex pattern that lays behind our sloping trendline may vary and is of no interest for us.
After connecting three lows, thus creating support, we wait for strong downward candle penetrating support and closing below it.
We enter on candle close, placing protective stop loss above the high of correction.
First low (starting point of our trendline) will mark the price level at which we place our take profit.
Buy order:
Price trending above SMA 200 (uptrend).
We connect three high in the correction, creating downwards sloping resistance trendline (sloping in the opposite direction to trend).
Angle of the slope is irrelevant, same as bottom (support) trendline. Therefore, forex pattern that lays behind our sloping trendline may vary and is of no interest for us.
After connecting three highs, thus creating resistance, we wait for strong upward candle penetrating resistance and closing above it.
We enter on candle close, placing protective stop loss below the low of correction.
First high (starting point of our trendline) will mark the price level at which we place our take profit.
