Strategy on trend lines
When trading Forex, you can identify a lot of different patterns; just watch the chart of a currency pair, noticing repeating moments, you can then develop your own work scheme.
Many Forex strategies are built on this principle, and the trend line strategy is no exception.
It is suitable for any currency pair, and can also be used in trading using other trading tools that are available in the MetaTrader 4 trading terminal.
Trading takes place on a five-minute time interval M5, and in order to identify places to enter the market, a one-hour time frame H1 will be used. This approach will allow us to work only in the direction of the main trend, without paying attention to price rollbacks.
The trend line strategy is one of the most universal and can be used on various time periods and for any instruments. To get started, you need to build just one trend line.
Constructing the trend line itself is quite simple using standard tools in the metatrader trading platform, you will find them on the menu tab "Insert" - "Lines" - "Trend line". You can also use special indicators for these purposes - http://time-forex.com/indikators
Trade.
2. Depending on the direction of price movement, we find significant minimums or maximums; in an upward trend we use minimums, in a downward trend we use maximums.
To build a trend line, we will need two points through which we will draw a line; it can also be called a support line, since this is where the last two corrections .
3. The resulting line will serve as a guide for us to open a transaction; after constructing it, all that remains is to wait for the next trend rollback to occur.
In this case, it is not necessary that the reversal occurs exactly on this line; a discrepancy of several points is allowed.
To open a deal, both instant and pending orders can also be used, it’s just the way you like it.
4. After completing the transaction, we switch to M5 and begin to monitor the price movement, if it starts to move against our position, after 10 points we close the order, in the same case, when the price has moved in the desired direction, we wait for the first signs of a reversal on M5 and close the order already with profit.
5. For insurance, it is recommended to immediately set a stop loss at 100 points from the current price immediately after opening an order.
The strategy on trend lines works in most cases, the main condition for its work is the presence of clearly defined pullbacks (corrections) of the price in Forex. If you wish, you can adjust this trading option at your discretion and achieve even greater profitability.