The last-kiss trade is a nice way to trade high-probability breakout trades.
Here are the steps for the last-kiss trade:
-Wait for the price to consolidate in a box between two zones.
-The box should have at least two touches on both zones.
-Wait for the price to break beyond one of the zones.
-Once the price returns back to the consolidation box, wait for the market to print a last-kiss candlestick on the edge of the box.
-For sell trades, a sell stop is placed below the low of the last-kiss candlestick, and for buy trades, a buy stop is placed above the high of the
-Emergency stop loss is placed in the midpoint of the consolidation box.
-The profit target is the nearest zone.
Could you expound on this? What does “two touches on both zones” mean?
Kinda late to the party but the box acts as local support and resistance in a range.
At least two touches by either candle close or wick is needed for the upper and lower range.
so 3 touches to range high and one range low doesn’t count for this setup.
This strategy is from the book Naked Forex. I started backtesting it on 1-5-15-30min and 4h charts on eurusd.
Doesn’t work for me but my ranges are a lot tighter so I’ll try to test it again
Very interesting book, I found it really helpful when I first learned.
What else did you find helpful? Did you come across any trading system in books you’ve read that worked on forex?
I can mention three.
The “box breakout” trades described by Bob Volman in his two books work for me.
They’re actually pretty similar to the “last kiss” method described just above.
I treat them mostly as postcongestion trend resumptions. Occasionally they’re postcongestion reversals but those are rarer and of course riskier.
1-2-3 formations have also always worked for me, with an “R” around 1.0 or a bit less, but not so well with a bigger “R”.
For a simple system with indicators, the old “Camelback Technique” has always worked reliably for me using Joe Ross’s trade management method, also with a low “R” and a high win-rate, provided I avoid high-volume bars and expanding bar-ranges.
For me, the main thing is to avoid fast charts and multiple-indicator systems, and stick mostly to price action. The indicators in the Camelback system are only for directional bias, not for trade entries…
This is a nice neat rational pattern.
There is too little attention on continuation patterns - all over the internet it’s all about split-second reversals that get you 500 pips for only 3 pips risk. And blah blah blah…
May I ask why you call it last kiss?
That’s what the book’s authors (Alex Nekritin and Walter Peters) called it.
It’s an “optimistic” name.
The idea is that the price has hung around a level, departed from it, come back for one last look at it, and decided to go off and not come back for now - hence “last kiss”.