As you all know, when the market trending, it doesn’t usually move in one direction, it usually moves in waves or zigzag pattern, here is an example:
In upward trend ,once the resistance is broken and the market starts trending , It would usually fly to a specific point, then the market will start consolidating / correcting, then it would pullback from support and continue rising or It would break below support and the trend usually reverses !!!
The following strategy will teach you 2 techniques; Locking & Switching; however this strategy would help profiting from the market when the market is trending or consolidating and it would turn your loses to profit.
Strategy 1 # : Locking
As shown on the chart below in our example, we're going to buy 1 Lot at support level at point "A", when the market starts correcting at point "B" , we will lock our buy trade from point "A" , and we will add another position , we will sell 1 Lot, once the correction is over and the market starts resuming as shown at point "C", we will exit the sell trade from point "B" and we will add another long position, we will buy one more lot, once resistance is reached at point "D" we will exit both buys from point "A" & "B" .
Strategy 2 # : Switching
In the previous strategy I've said " once the correction is over and the market starts resuming at point C " , now what would happen If the market doesn't resume , On the contrary the consolidation from point "B" resumes and breaks below the support level , what's the right choice !
In this case as shown on the chart below, when support is broken as shown at point C , we will close our lock trade from point "A" and will switch from bullish to bearish and add one more short trade, we will sell 1 Lot, once support is reached at point "D" we will exit both sells from point "B" & "C" .
I hope you find this piece of information useful, I'll add examples later..
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