if trade works out as planned, you are already in profit
The Trading Rules
#1: On the daily chart, see if you can spot an inside bar. On this daily chart of USDJPY currency pair, you can see that an inside bar has formed:
#2: When you see an inside bar has formed, then next thing you do is to switch to a 1 hour or 30 minute chart and wait for support and resistance levels to form. You are not to use the support and resistance levels found in the in timeframe of the inside bar.
even though some daily inside bars have really small range, there will be others that have large trading ranges which means that you most likely will have large stop loss distance if your trade inside bars the normal way. Using this technique I have shown here, you can reduce the stop loss distance and increase your risk to reward greatly in the process as well.
one trade a day system and this is really good because it stops you from overtrading. The fewer trades you take, the better it is for you, really.
if you take profit targets are hit, you can make profits in hundreds of pips because the timeframe of trading is not minutes but days! It’s only the trade entries that are done in the smaller timeframe.
Disadvantages Of The Daily Inside Bar With Support and Resistance Level Breakout Strategy
All forex trading strategies have weakness and expect the same on this daily inside bar system with support and resistance levels and one of its cons will the fact that sometimes you will have false breakouts of support and resistance levels in the 1 hour or 30 minute timeframe and this will result in price going int the other direction and taking out your stop loss.
stop loss can be quite too close and you may get stopped out prematurely.
Hope you learnt something new with this…please share ? Thanks.