I am getting a strategy now where I use entry orders (something that I used to use but then left behind for a while, and have returned to of late) based on a combination of the following:
- major trend-lines (support and/or resistance);
- Fibonacci levels (through higher time-frames);
- round-number levels, e.g. in EUR/USD: 1.3800, 1.3700, etc.
For example, if there was no major support trend line (and/or Fibonacci level)
between, say, EUR/USD 1.3800 and 1.3700, i.e. there was a clear run of one
hundred pips, and the Euro was bearish, I could set an entry order a few pips
below 1.3800 and set the limit a few pips above 1.3700 (the stop, accordingly,
could be the same distance, or half, depending on your R/R ratio)...
I am testing this out but it has worked a few times... Trying to pick the spot
is usually not that difficult under normal conditions: a 'few' pips, say, under
a round-number level tends to be reached once a pair has cleared that level
with some conviction... I am getting to observe that many times a pair will go,
say, in the case of EUR/USD, below a round-number level by a few pips, say
1.3790, and then bounce back up above 1.3800 (even in the absence of other
resistance, purely on the basis of the round-number level being a collective,
psychological barrier); HOWEVER, once you get to, say, 1.3780, it is then more
likely that the 1.3800 level will have been cleared for good... If you wanted to
be even more sure, you could lose a few more pips of the initial break below
that level and put an entry trigger at 1.3770... If your limit were at 1.3710,
you would still have bagged sixty (60) pips, if the pair hit your profit...
Conversely, if you felt that your profit level was too close to the next round-number
level (1.3700) and the pair would just bounce back before getting there, you could
set your profit slightly above it, say, 1.3715 or even 1.3720... Even so, you would
have bagged no less than fifty (50) pips, without any sweat... And then you could
replicate this across many pairs, to the upside as well as to the downside... It does
seem to work, but I am not getting too fixated on it, and it is not always suitable
(think of a high-impact news release situation, for example, where lots of spikes
would potentially trigger your order, miss your profit, and then stop you out)...