Beginners Trader Strategy - Trend Signal Strategy
General Description
In the trend signal strategy, we look for a candlestick that indicates a return to a previous trend following a correction.
This strategy is appropriate for time frames of 15 minutes and higher, where the bigger the time frame, the higher the level of precision.
This strategy is suitable for all currency pairs, commodities, indices, stocks and futures contracts.
Position Management
A signal for entering a buy trade is triggered when an upwards trend, followed by a correction (down trend), has been identified, and a long bullish candlestick appears whose length includes the three preceding bearish candlesticks.
A signal for entering a sell trade is triggered when an downwards trend, followed by a correction (uptrend), has been identified, and a long bearish candlestick appears whose length includes the three preceding bullish candlesticks.
The trade should be entered at the start of the first candlestick that opens after the signal.
The stop loss should be set at a distance equal to 20% the length of the correcting candlestick, and moved at the start of each new wave in order to lock in profits.
Example long trade:
In this example, we review the strategy in the AUD/USD currency pair, in a one hour time frame, where an uptrend and subsequent correction have been identified. The signal is received by a long, corrective bullish candlestick, whose length includes the three bearish candlesticks.
After identifying this signal, we will enter a long position at the start of the next candlestick. The correcting candlestick is 72 pips long, with 20% being 14 pips, meaning that the stop loss will be placed at the opening value of the new candlestick minus 24 pips. In this case, the value is 0.9689.
The stop loss will be adjusted for each uptrend wave, in order to lock in profits.
Example short trade:
In this example, we review the strategy in the GBP/JPY currency pair, in a one hour time frame, where a downtrend and subsequent correction have been identified. The signal is received by a long, corrective bearish candlestick, whose length includes the three preceding bullish candlesticks.
After identifying this signal, we will enter a short position at the start of the next candlestick. The correcting candlestick is 1792 pips long, with 20% of 1792 being 358 pips, meaning that the stop loss will be set fir the opening value of the new candlestick minus 358 pips. In this case, the value is 199.81.
The stop loss will be adjusted for each downtrend wave, in order to lock in profits. In this example, we would have earned 7163 pips over a period of 7 months.
Whats Next?
* Tunnel strategy
Or go back to the Education index
In the trend signal strategy, we look for a candlestick that indicates a return to a previous trend following a correction.
This strategy is appropriate for time frames of 15 minutes and higher, where the bigger the time frame, the higher the level of precision.
This strategy is suitable for all currency pairs, commodities, indices, stocks and futures contracts.
Position Management
A signal for entering a buy trade is triggered when an upwards trend, followed by a correction (down trend), has been identified, and a long bullish candlestick appears whose length includes the three preceding bearish candlesticks.
A signal for entering a sell trade is triggered when an downwards trend, followed by a correction (uptrend), has been identified, and a long bearish candlestick appears whose length includes the three preceding bullish candlesticks.
The trade should be entered at the start of the first candlestick that opens after the signal.
The stop loss should be set at a distance equal to 20% the length of the correcting candlestick, and moved at the start of each new wave in order to lock in profits.
Example long trade:
In this example, we review the strategy in the AUD/USD currency pair, in a one hour time frame, where an uptrend and subsequent correction have been identified. The signal is received by a long, corrective bullish candlestick, whose length includes the three bearish candlesticks.
After identifying this signal, we will enter a long position at the start of the next candlestick. The correcting candlestick is 72 pips long, with 20% being 14 pips, meaning that the stop loss will be placed at the opening value of the new candlestick minus 24 pips. In this case, the value is 0.9689.
The stop loss will be adjusted for each uptrend wave, in order to lock in profits.
Example short trade:
In this example, we review the strategy in the GBP/JPY currency pair, in a one hour time frame, where a downtrend and subsequent correction have been identified. The signal is received by a long, corrective bearish candlestick, whose length includes the three preceding bullish candlesticks.
After identifying this signal, we will enter a short position at the start of the next candlestick. The correcting candlestick is 1792 pips long, with 20% of 1792 being 358 pips, meaning that the stop loss will be set fir the opening value of the new candlestick minus 358 pips. In this case, the value is 199.81.
The stop loss will be adjusted for each downtrend wave, in order to lock in profits. In this example, we would have earned 7163 pips over a period of 7 months.
Whats Next?
* Tunnel strategy
Or go back to the Education index
