This is my main strategy that I love to trade and is highly profitable when you follow the rules. Please read the charts carefully and if you have questions ask and I would love to answer them!
This strategy is not as effective on GBP pairs!
Recommended pairs are USD/CAD, EUR/USD, USD/JPY, NZD/USD, AUD/USD, USD/CHF; use only 15,30 or 60 minute time frames! 4 hour may also be used but set ups are very few and far between. NEVER USE ON LESS THAN 15 MINUTES!!!
Stop Loss is generally around 20-30 pips.
Stop Loss is to be just below (usually a few pips) of VERY recent swing low or just above swing high.
Take Profit is up to you but I generally go for 30-100+ pips depending on the set up quality and trend.
ONLY enter on Bullish/Bearish engulfing (if you want to play super safe only enter on engulfing candle set ups) or Hammer candle and then break above high of hammer on next candle.
NEVER enter if the MACD has not crossed in your direction. This is a filter against bad trades and will save you many times!
MAIN RULE. Enter on engulfing candle or hammer, after you see a double bottom or double top and there is a divergence on the stochastic (14,3,3) settings. You might on occassion see a double bottom that goes lower on the retest, and this is even better! The same applies for double top. See examples.
Untitled <–CLICK HERE for full size images of examples!!!
Here’s a pointer: if you are looking at a sell and the white macd lines have not crossed below the red line (vice versa for a buy) you should not be placing the trade!!! This is added as confirmation and works VERY well.
Untitled <—link for full size pics of this strategy! Please remember to set a break even stop loss after 20 pips or so and dont let a winner turn into a loser!!! Always try to get as much reward as you are risking on a trade!
How are you determining your exits (white lines) on these pics? I understand your exit strategy where you T/P from +30 to +100 pips, but my question is the “white lines”. Would you agree that if I were in a trade I wouldn’t be able to draw that line anywhere until after the trend reverses?
Hi, Great, I just read about this. Lookes at EUR/USD on 15min & pips in the bag. Big THANK YOU. I intend to use this again. I am now back into that trade.
Hi, Am I right in thinking (if of course MACD and Stoch signal) that on a bullish engulfing candle, you are BUYING and on a Bearish engulfing candle you are SELLING?
Funny seeing this thread as Ive been using this strategy for a little over a year now with consistent profits. I use the semafor in conjunction to spot deviation levels. Only amendment I would add to it is its better to wait until both stoch and MACD are divergent at the SAME time. Ill use 1 hr chart to spot divergence and move to the 15 or 30 min to find a good entry on engulfing candle. But this is the ONLY strategy I use now takes patience of course but its definitely worth its weight in DIAMONDS!! If you know what i mean.
try to catch them in real time.