…..In this post, I am going to share a Forex Trading Strategy which takes advantage of these 2 important elements happening in the market :
1) Price ” Bouncing ” Off A ( Down ) Trend - Line
2) And Then….. Relying on a ” Bullish REJECTION Zone “ To Acheive A High Probability ( Low Risk…HIGH Rewards ) Entry..
Read on below as I share this profitable strategy in a step-by-step manner for You !
For a ranging market… ( or the so called Sideway market )…..
We would use a ” Horizontal Line ” to mark out the the important Resistance / Support levels….
Well…that is for a Ranging Market though……BUT how about a ” Trending ” market.. ?
Hmmm….You still can use a Horizontal Line for a Trending market somehow…..
HOWEVER…..by doing that….
….. You would most likely be getting many FALSE signals from the market as the resistance points would be shifting higher & higher…( for an up-trend )…
…as well as seeing Support points ….shifting lower & lower…( for a down-trend )..
So by using a Horizontal Line for a Trending market….it is NOT beneficial at all to help with Your market analysis..
On the other hand…..if You know how to use a Trend-Line ( and NOT a Horizontal Line ) for a Trending Market..
It could help You Pin-Point ” High Probability Turning Point “ to get into the Trend again…..in order to achieve a Low Risk & HIGH Rewards trade.
Which also means You can ” Project A Future Turning Point ” way in advance when You see the Price coming close to that Trend-Line ( once ) again….
( which I would be showing You on this technique below later )
In any trading game, we are ONLY interested with ” Predicting Future Market Movements “…
Because only by accurately doing so……we can then nail those valuable Pips & make Profits out of our trades……( again & again ! )
Agree on this too ?
BUT….
If You’re still unsure on - How to fully make good use of such trend-line strategy yet ….
…OR simply NOT confident about it at all ( though You have been reading up about it )…
Then after reading this entire strategy today……You will truly benefit tremendously from it.
This is an exact forex strategy that I use to nail 80 Pips Profits on the USDCAD ….( while ONLY risking half the risk at 40 pips )
Ask any trader is this a good risk/reward ratio….
I am sure they would ” agree ” too….* smile *
Alright…let’s get started now ya.
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A Forex Strategy Combining ( Down ) TRend-Line …..& ” Bullish Rejection Zone ”
( Indeed a Very Profitable strategy with minimum risk….
BUT HIGH Rewards ! …And You can use on Any Pairs too !)
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The best way to understand & master a particular trading strategy is to learn it through Step-By-Step explanations……..right ?
Not really though !
I personally think that it is more beneficial to learn it in such a way that ..” You’re also SEEING…….what I am seeing in the market “…
…And more importantly - ” Before the actual Set-up is complete formed ! “
This is essential so that once the ” Proven Set-Up ” is completed in the market…You’re all ready to go in then..
If I just show You the ” Completed ” Set-Up…..instead of the ” before forming ” situation..
Then when You try to use this strategy in the forex market Yourself..
It could pose a challenge to You then…..as You’re NOT sure what to ” expect ” …
And so….. Your inconsistent confident level would be a major hindrance while You’re trying to mater this strategy ….
(…and would definitely prevent You from reaping the full benefits from this strategy.)
So just like all the previous forex strategies I shared with You guys..
This time round I am going to show You in such a manner :
=> From the ” before forming ” to …” ENtry “….to ” Taking-Profit “ & Winning the Trade at last !
Cool ?
Here we go….
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This is the ” Exact Situation ” I saw on the USDCAD ( 4 hourly ) for a start :
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Upon opening up the USDCAD ( 4 hourly ) chart, I saw the Price approaching the ” Top Limit ” of the Down Trend-Line once again…
When this happens…
I know there is a potentially good ” SHORTING Opportunity ” coming soon for this pair..
Like This :
Forex Trendline Strategy
So upon seeing this ” Price Approaching Trend-Line ” situation..
What should You do next in order to…….. prepare Yourself to look for some good ” hints ” from the market to confirm Your ” SHORTING ” bias then ?
Simple actually…
Just drop down to the ” Next Smaller ” time frame - Which is the 1 hourly for this case..
And then look for a ” Bullish Price Rejection Zone / Set-up “…
There are many such ” Rejection Zone / Set-Up ” You can take advantage of to confirm Your bias to Short / Sell actually..
But for the purpose of this strategy, I will just reveal the exact ” Rejection Zone ” that I use to confirm my bias.
I could not share ALL the ” rejection zone / set-ups ” merely with this short article today..
Which I think You can understand on that too …
In the days to come…..
…. I will share them one by one ( and explained them in the form of ” simple to understand strategy ” for You guys ) as I come across in my own trading …
( This is definitely one major benefit of being my valuable subscriber….! * smile * )
Alright….let’s continue with this strategy for now..
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So What Kind Of ” Rejection Zone / Set-Up ” Do I Look For….?
….Once Dropped Down To The 1 Hourly Time-Frame ?
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Upon switching to the next smaller time frame ( which is the 1 hourly )….
…This is what I saw :
Forex Trading Strategy With Trend-Line
Remember this…
The reason why You are dropping down the 1 hourly time-frame is because You are ” looking for good hints ” to support Your SHORTING Bias…
Again………You are doing this due to the fact that the ” Price Is Approaching The ( Down ) Trend-Line ” on the 4 hourly time-frame …once again..
So without a ” Good Hint “…..
And Without ” Considering The Risk Involved ” for this position…
Then You are NOT ready to enter the market to SHORT….
The key to be successful….AND ” making nice consistent Profits ” from forex trading is to secure as many winning trades as possible..
That’s a logical and proven fact…
I am a stronge believer of Price Action Strategies…
And I rely the Price Actions in the market to confirm my bias and then guide me into a certain position I wish to trade..
Why the need to do that ?…….
Are You wondering on that too ?
Nothing complicated actually….but as long as one can extract as ” many hints / Confluence ” from the Price Actions in the market …
The success rate would be ( very ) high end of the day…
What matters most is ” WHAT ” should You look for that is paramount to Your success….!!
So from this moment onwards……
…I will be explaining on ” WHAT ” am I looking ( or waiting ) for before I finally decide to commit into this postion to SHORT the USDCAD…
Let me show You the illustration again as I explain on some important details here to help You understand :
Forex Trading Strategy Using Trend-Line
As You can see from the above illustration…
There is ” still some distance away the price is from the ( blue ) Trend-Line top limit “…
Moreover………there are also some ” Pin-Bars ” on that series of candlesticks reflecting
the price actions in the market .
What these current Pinbars and Price Actions mean is that - There is a ” high likelihood ” that the price will CLIMB further..
Hence, I am reluctant to SHORT at the current Price level…..
…But choose to WAIT instead for ” Better Price & Desirable Price Actions ” in the market..
…..So did my ” Patience ” pays off ?
Yes….indeed !
The price actually climbs all the way to the level where the previous top is..
And then FAIL and ” Get Rejected ” there…..!!
( Proven by a few Bearish Candlesticks reflecting a high-probability of REJECTION at this level )
Here’s an illustration to show You :
Forex Trend-Line Strategy
As shown in the illustrations above..
The price climbs all the way and ” stalled ” upon touching the Trend-Line nicely…
But that is not always the case though…
Sometimes the price would pierce through……and then plunge down again…
Sometimes it would not even touch the trend-line ….and the next thing is that it PLUNGED down fiercely …
So the key here is to gather as ” many such hints ” from the market as possible..
That is a much better & ” Profitable ” way to trade the forex market…* smile *
So upon seeing that ” Nice REJECTION ” zone…
And knowing that the ” Risk ( Stop Loss ) ” needed is ONLY 40 Pips..
I know this is the ” set-up ” I wanted..
NOTE : At the same time, I already knew that the POTENTIAL REWARDS ( Pips ) I can aim for with such set-up in the market. ( which I would be showing You later below )
The Potential Rewards ( after calculation ) is about 150 Pips for this set-up…
BUT….I am just aiming for a conservative 80 Pips for this trade…..( my style ! * smile * )
Good enough as the risk involve is ONLY 40 PIps..
Hence giving me a Reward/ Risk ratio of 2 : 1….
TWICE that is !!
Before I get into the trade summary…
Let me show You ( with illustrations ) on how I calculated the Potential Rewards You can aim for ( that’s how I derive the 80 Pips Take-Profit Target ) :
Forex Trendline Strategy
This Step on ” Calculating Potential Rewards ” was already done so BEFORE I get into my SHORT ENTRY..
It is part of the trading ( or battle ) plan so that the Reward / Risk ratio could be determined way before hand…
And if it is worth it….I will ” wait ” and continue monitor this trade closely as the set-ups unfold in the market…
So as can be seen from the illustrations above…
The Potential Rewards is calculated to be 150 Pips..
And I am just aiming for 80 Pips out of these 150…
Is it consider ” realistic ” here ?
…..VERY ! * smile *
As I intend to trade this position for short-term ( intra-day ) profits..
Hence 80 Pips is already more than enough for me.
Well…perhaps some of You guys might be wondering about this question too :
” Hey Aaron….why don’t You aim for more pips in the range of 150 - 200 pips ?….
Since this is a Down-Trendline…..Why don’t ride the Trend further for more Pip ? “
My Answer for You guys :
Yes…..aiming for more profits in the range of 150 - 200 pips is definitely good….
Especially when this is a ( Down ) Trend-Line….which carries a high probability of Strong Down-Trend..
HOWEVER…..
The reason why I am just aiming for a Short Trem ( Intra-day ) profits of just 80 Pips is solely back-up by some strong ” logical facts ” here though….here it is :
…See on the illustrations above, You can also see a really STRONG SUPPORT Line for
this USDCAD pair right ?
As long as this Support is NOT broken…..
I will ” respect ” it very much as it is literally NOT wise to presume that it would be broken
for sure…
( One of my winning rule is ” Never Presume ” anything in the market…..remember ? *smile *)
BUT once that Support is BROKEN…
Then YES….I would be aiming for BIGGER Profits in the range of 150 - 200 pips….
OR EVEN MORE !!
Now You know why I am aiming for just 80 Pips for this trade……
Being conservative and respect the support line is essential here.
Trading just 1 standard lot and nailing 80 Pips is already USD$800 profits….
What if You can do it confidently 4 -5 times a month ?
$3,200 - $4,000 just trading 1 standard lot……?
Not bad I am sure…
And if it is a ” High Probability Set-Up & Proven Strategy ” You’re using…
Then it would make the entire trading process very enjoyable too - WITHOUT You having to worry and feeling fearful …which happen to most ..
Right !
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Here’s the trade details for this position :
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SHORT Entry : 0.99595
Stop - Loss : 0.99995 ( 40 Pips Risk )
Take - Profit : 0.98795 ( 80 Pips Rewards )
So How Did This Trade Turns Out Eventually ?
Here’s the Answer for You :
This trade intially goes ” slightly ” in my flavor….
But shortly after that…it starts climbing up again and reaching as high as the previous TOP…
Just 10 pips more and it would hit my Stop-Loss for this trade…
( as You can see too above )
Hmmm……Sometimes a small difference of 5 - 10 pips can literally make or break a trade …
Imagine I am not giving any allowance ( extra pips ) for my Stop-Loss…
Then it would got hit and there goes another LOSING trade….
( which could be a WINNING one eventually )…
Hence, whenever I decide on a Stop-Loss , I will make sure I give it an extra 10 - 15 pips.…( especially for such TIGHT Stop-Loss placement )
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….A while back, I have written a forex trading tip on ” Strategic Stop-Loss Placement - In Order To Avoid Getting Hit Unneccessary “ for my fellow readers. If You are still NOT confident about Stop-Loss Placement yet….. ( and have not read on that tip I wrote )…
=> You can still read the entire Stop-Loss Technique here
( ….Please do it AFTER You read through this strategy as it is NOT good to disrupt the FLOW when learning a new forex strategy ! * smile * )
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Alright….back to the last stage of the trade progress now..
This SHORTING trade last for slightly more than a day before my Take - Profit target
finally hit….
And if You notice too..
The ” BEARISH ” action only starts after the 3rd Tops.
Which is also known as a ” Triple Tops ” formation in the market…
Note how ” BEARISH ( Long & Full ) ” those candlesticks are after the 3rd Top…
Price actually PLUNGED down aggressively with no break/retracement at all..
What does this shows ?
It shows that there are big ( volume of ) funds pouring into the market to SHORT this pair as well…at that price point.
Where did those BIG Funds coming from ?
Obviously from the major banks, institutions, hedge funds….and combined power of both Professional & Retail traders …..right !
…..Those BIG Players are watching such Trend-Line too !
So it definitely pays to understand & eventually master this forex strategy on Trend-Line trading..
Combining with ” Price Actions in the market ” to seek for HIGH PROBABILIY REJECTION Set-up……
…The Winning % can be really astounding most of the time ! * smile *
And now You know…..
I would consider the above strategy a very simple one in fact..
( But ( very ) Profitable at the same time ….)
The key is to know ” what to look ” for when a price hit a Trend-Line LIMIT - In order to support Your bias to Short/ Buy..
After that…weight the Reward/Risk ratio to see if it is feasible to trade it..
That’s about it.
The beauty of such strategy is that You can use it on almost ANY currency pairs available on Your trading platform..
Why ?
Because it has been proven to work on them !
NO Technical Indicators needed….
NO Complicated Trading Systems needed…
NO Need To Read Tedious Financial Reports / News..
Isn’t it ( really )Simple after all…? LOL
If You are not confident yet……
Do not give up..
Just learn bit by bit progressively…
Soon You can also get the ” full PICTURE ” and finally ” GET IT ” too..
