There’s another way We trade the simple trendline trading strategy, and we do that by using the aggressive method.
So what is the trendline trading strategy aggressive method?
Forex Trendline Trading Strategy Aggressive Method Explained
With this method,
- you immediately buy or sell at market prices as soon as the price hits a trendline.
- you do not wait for forex reversal candlestick chart patterns signals
Currency Pairs: Any
Timeframes: any
other Forex Indicators: none
Why?
If you’re trading for a while, you will see that sometimes, when a price hits a chart trendline, it immediately bounces down or up. Price responds promptly to the chart trendline, respecting it.
So if it’s a downward trendline, the price hits it and immediately moves down.
If it is an upward trendline, the price comes down, hits it, and immediately moves upward!
Knowing this behavior, we can sell or buy immediately when the price touches a trendline, anticipating that the price will move away from the trendline as soon as it hits it.
Trading Rules
- Draw a trendline. If you don’t know how to click this link: how to draw a trendline.
- Wait for the price to come to the trendline.
- As soon as the price hits the trendline, buy or sell at market price immediately.
- Put your stop loss(SL) at 30-40 pips if you are trading based on the 1hr timeframe and above.
- To take profit, use a risk: reward ratio of 1:3 or use previous chart swing lows/highs as take profit targets.
Example:
- In the daily GBPJPY mt4 chart below, you can see that a downward trendline was a draw.
- Price came and touched it and fell down, making a 760 pips move.
- If you sold as soon as they touched the trendline, you would have sold at the top!
Advantages of The Trendline Trading Aggressive Method
- fast profits when price responds as anticipated.
- Ability to move stop loss(SL) to breakeven quickly, creating a risk-free trade.
- Enhance your risk: reward
- The ability to buy at the bottom and sell at the top!
- Ability to pyramid. Adding on more fx trades.
Disadvantages of the Trendline Trading Aggressive Method
- Trendlines are not lines drawn in concrete; they get broken, so your stop loss will get hit. Such is the nature of forex trading.
- Fear of buying or selling: you will be buying when all you see is a red(bearish) candlestick is telling you that you shouldn’t be buying. Or selling when you see a green (bullish) candlestick telling you that you shouldn’t be selling.
