Trading system Breaking Points
Good day. Personally, I am not a fan of intraday forex trading, more inclined to the daily charts. And I highly recommend them to beginners. But newcomers do not care)) After all, it seems to them that within a day they will be able to earn many times more. Well, yes, of course ... Why am I doing this? It is difficult to switch from intraday trading immediately to daily charts. But there are intermediate Forex strategies that combine initial analysis on daily charts and directly inputs on small timeframes.
One such trading system is strategy. Breaking points. I recommend that you pay attention to the basis of the strategy, the very “punch points” (more below). You can build on their basis your own TS.
Features of the Forex Strategy Breaking Points
Currency pairs: GBPAUD, EURAUD, EURNZD, GBPNZD, EURJPY, GBPJPY
Timeframe: D1 + M15
Trading Time: Several times a week
Recommended DC: Alpari, RoboForex
At the heart of the forex strategy Breaking points lies the idea that in almost every trading week, except for periods of consolidation, the market moves at least 100-200 points. Our task is to enter the direction of market movement this week and exit before the end of the week. Entering “just like that” is stupid, because we need to have an advantage. So how do we open positions?
Those of you who trade within the day probably noticed how the market begins to “twitch” when approaching the High and Low points of the candles of the previous days (meaning the candles on chart D1). Why? Because these are emotionally charged levels at which the price decides where to go. Both large players and the crowd pay attention to these points. And after the breakdown of one of these levels, one can speak with a certain degree of certainty about the nascent movement.
How to enter the market?
We will enter directly into the market with the help of pending orders Buy Stop and Sell Stop. We will place our pending orders on Monday, immediately after the market opens (Friday evening is not suitable because of the danger of getting to the gap).
So, the input algorithm is as follows:
1. After the market opens on Monday, we mark the High and Low levels of the previous four days (Friday, Thursday, Wednesday, and Tuesday) on the chart of the traded currency pair.
2. Go to the M15 timeframe (just change the timeframe from D1 to M15 so that the marked levels remain on the chart).
3. We place pending Buy Stop and Sell Stop orders at the levels closest to the Monday open price (which we noted earlier). Those. we will have one level for sales, one for purchases.
4. If the level passes very close to the opening price (less than 20 points), then it should be skipped and set the delay at the next, more distant level. Also pay attention to support / resistance levels, as there is a high probability of a price rebound from them.
5. Enter should be 2 orders. They have one entry point, but take profits will be different (see below).
Stop Loss and Take Profit
Stop loss 30-40 points (at your discretion). In one transaction, you should not risk more than 2-3% of the deposit, because unprofitable transactions will periodically. This is normal.
Take profit for the first order - 50 points, or the nearest level. For the second order - 100 points, or the next level. When the take profit of the first order is triggered, it is worth moving the second order to breakeven (we translate the stop loss at the transaction opening price).
At the end of the week, do not forget to close all orders.
For advanced traders
- More experienced players can use not two, but three orders when entering a position. The third order is left until the end of the week. Often this way you can earn an extra 300-500 points. Stop-loss of the third order is transferred to b / y simultaneously with the second order.
- Advanced traders can also re-enter during the week at levels that have already worked in profit. If there was a stop loss, you shouldn’t enter at the same level again - there’s a great chance to get into a dribble.
- Another good tip: limit your total losses. For example, up to 200 points per week. After the losses exceed the level set by you, you no longer trade this week. This will help reduce drawdowns during periods of consolidation.
P.S. The Breaking Points trading system is discussed in more detail in a video tutorial at the beginning of the article.