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Forex 20 pips


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Re: Forex 20 pips

 

I've read the book (it's a small one, with 12 pages only) and can tell you that the strategy is based on trading the H1 retracement.

 

It assumes there were 4 or more H1 candles closed in one direction (for example Bullish).

Then you wait for the next H1 candle. If when it closes it is Bearish, according to rules you open market position in the direction of that last candle (i.e. go Short) and look for 20 pips of profit.

 

The drawback of this system is that as per author's info you need to have big enough Stoploss (150 or more pips) in order to get consistent profit. Which creates return rate of 20/150. With this number you need to maintain very high winning rate in order to succeed.

 

In principle, the strategy itself has rationale behind it - after a strong directional move occurs there always be a retracement or even reversal (depends on a pair you trade and other factors, like news announcement). But trading retracements we're breaking the rule to trade with the trend. Thus there is a need in a huge stoploss. My suggestion - if you want to try this strategy, check if retracement is starting to occur near support or resistance line. This will increase your odds to hit takeprofit.

 

Anyways, that was a nice reading for me before I go to bed. :)

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