Me personally, I don't enter a trade every single day. Instead, I look for those positions where I know the direction for days on end.
So here you will see an effective strategy to stay away from ranging markets, and know where to enter a trade, and feel confident about the direction.
You can use this strategy down to a 15-minute chart, but I wouldn't advise getting more than a 1:1 ratio if you don't have a confirmation on at least an hourly chart with the same pattern. And, if you do enter a trade on smaller timeframes, be sure to enter in US of UK open.
The best example I have right now is the EURUSD
A is always on the first point of resistance
B first point of support
C Second resistance
D Second support
When you have a clear C and D point, you always wait for a pullback to add a stop order below D or above C. You use the pullback top or bottom as a stop. If none gets triggered (like in this example), price is likely to range between these 2 points for a while. And that's the whole point of this strategy, not to get stuck in a range for days or weeks with an open trade...
In May, I discovered a similar pattern in a smaller range and gave me a much better entry opportunity.
So where would I place a target in this strategy?
The easiest target would be the A point, as this large retracement did not trigger enough sellers to take out March low.
Even if price rallies way above this point, it's most likely to retrace to this price level again and look for a new entry long.
So here you will see an effective strategy to stay away from ranging markets, and know where to enter a trade, and feel confident about the direction.
You can use this strategy down to a 15-minute chart, but I wouldn't advise getting more than a 1:1 ratio if you don't have a confirmation on at least an hourly chart with the same pattern. And, if you do enter a trade on smaller timeframes, be sure to enter in US of UK open.
The best example I have right now is the EURUSD
A is always on the first point of resistance
B first point of support
C Second resistance
D Second support
When you have a clear C and D point, you always wait for a pullback to add a stop order below D or above C. You use the pullback top or bottom as a stop. If none gets triggered (like in this example), price is likely to range between these 2 points for a while. And that's the whole point of this strategy, not to get stuck in a range for days or weeks with an open trade...
In May, I discovered a similar pattern in a smaller range and gave me a much better entry opportunity.
So where would I place a target in this strategy?
The easiest target would be the A point, as this large retracement did not trigger enough sellers to take out March low.
Even if price rallies way above this point, it's most likely to retrace to this price level again and look for a new entry long.
