This is a Trendline Breakout Trading Strategy With Awesome Oscillator. The awesome oscillator is used for trade entry confirmation.
In order for you to be able to use this forex trading system, you must know how to draw trendlines.
Timeframes required: Any
Currency Pairs: Any
Forex Indicators: Awesome Oscillator with default settings.
For the buying and selling rules, refer to this chart below showing you the buy and sell setups:
- Draw a downward trend line and wait for price to break it, which means a candlestick closes above the trendline.
- When that happens, next thing you do is check to see if you see the awesome oscillator bar is green and if so you got to step 3.
- Place a buy stop order at least 2 pips above the high of that candlestick that is above the trend line.
- Place your stop at least 2 pips below the low of the nearest swing low.
- For take profit, use previous swing high point or if that does not exist, then use 1:2 or 3 risk to reward ratio to calculate your profit target.
- Draw an upward trend line and wait for price to break it, which means a candlestick closes below the trend line.
- When that happens, next thing you do is check to see if you see the awesome oscillator bar is red and if so you got to step 3.
- Place a sell stop order at least 2 pips below the low of that candlestick that is below the trend line.
- Place your stop loss order at least 2 pips above the high of the nearest swing high point.
- For take profit, use previous swing low point or if that does not exits, then use 1:2 or 3 risk to reward ratio to calculate your profit target.
DISADVANTAGES OF TRENDLINE BREAKOUT STRATEGY WITH THE AWESOME OSCILLATOR
As usual, all forex trading strategies have their weaknesses and here are some for this system:
- if the nearest swing low or swing high points are far away, your stop loss distance can be huge.
- you really need to know how to draw the correct trend lines because wrong trend lines will give fake signals. This can take some time if you are a new trader.
- ranging market may cause some problems with this strategy.
ADVANTAGES OF TRENDLINE BREAKOUT TRADING STRATEGY WITH THE AWESOME OSCILLATOR
- A really powerful trading system when used in a strongly trending market.
- allows you to jump in just in the beginning of the trend and you can ride out the trend most of the way if you just wait for the next trend line to be intersected before you exit your trade.
- Good risk: reward ratio.
- Placing the stop loss below the nearest swing low or above the nearest swing high stops your trade from getting stopped out frequently.
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