R Strategy
Sixty Seventh session of Forex Training
Welcome back to Forex professional training in financial markets.
In this session R strategy will be studied thoroughly.
Strategy R
R strategy generates reliable and powerful signals despite its simple structure and method.
Trader can detect trend direction and important pivots that form at the end of trends thorough the R strategy.
Trader can simply utilise the R strategy alongside powerful and significant support and resistance lines.
[adv_thirdsec ]
Time Frames
Trader can exploit the R strategy on all timeframes, however, most reliable signals can be derived in H1 and longer timeframes.
Symbols
The R strategy is applicable on all symbols: Forex, Commodities and Stocks.
Complementary tools
Trader can combine the R strategy with RSI, Candlesticks, Divergence, Hidden Divergence and Fibonacci patterns.
Remarkable notifications
Trader must consider the following aspects:
- Market Price must touch support line at least 2 times. Support line with more than 4 hits is an ideal support line.
- A suitable support line has an angle more than 15 degrees, while it would be ideal if an angle is over 25 degrees.
- Appropriate timeframes are H4 and longer span.
- If market price returns towards the resistance line considerably after it has crossed a given resistance line, then the R strategy would become ineffective.
[adv_thirdsec ]
Sell Signal
When a price crosses the resistance line towards the top with complete candles over resistance line and then returns towards a given resistance line, if price passes the resistance line towards the bottom and Close Price of a candle forms under this line, then a sell signal would be generated after price goes lower than the Low price of that candle.
Three Take Profit prices can be derived as follows:
- The length of a Bearish candle that forms below a resistance line equals X1, thus, the 1st TP price can be X1 pips lower than the entry price.
- The distance between the Low price of given candle and the High price of the candle on the last peak equals X2, thus, trader can consider TP price X2 pips lower than the entry price.
- If a powerful pattern forms in this region, trader can consider the 3rd TP price via this pattern.
SL price can be determined considering TP price that trader selects.
On the graph, after the market price has hit the resistance line 4 times, it crossed the given line towards the top, then returned towards the bottom.
As a candle formed under the given resistance line, trader could place a Sell order.
TP prices could be determined by the Bearish candle length, the distance between Low price of this candle and High price of candle on the last peak, and also a Flag pattern in this area that could be detected in a shorter timeframe.
SL price varied based on selected TP price.
Significant notifications
- When price rises towards the resistance line without touching or crossing anything, if a powerful Bearish candle forms near the resistance line, then a powerful and reliable Sell signal is generated after price goes lower than that Bearish candle. On the left graph, price could not cross gradient resistance line, and after it went up near this line, a Dark Cloud /Engulfing candle has formed. Thus, trader could place a Sell order below Low price of the given candle.
[adv_thirdsec ]
- After price passes resistance line and returns towards it, if a powerful Bullish candle forms on the resistance line, then a reliable Buy signal will be generated. On the right graph, market price has passed the resistance line. Market price could not pass this line towards the bottom after the price had returned towards it. A Piercing Line/Engulfing candle has formed on this resistance line, thus, trader could place a Buy order. After price crossed the resistance line towards the bottom, trader could place a Sell order lower than the Bearish candle.
Buy Signal
When price passes the resistance line towards the bottom with complete candles over the resistance line and then returns towards the given resistance line, if price crosses the resistance line towards the top and Close Price of candle forms above this line, then a Buy signal would be generated after the price goes higher than the High price of that candle.
Three Take Profit prices can be derived as follows:
- The length of the Bullish candle that forms above the resistance line equals X1, thus, the 1st TP price can be X1 pips higher than the entry price.
- The distance between High price of the given candle and Low price the candle on the last valley equals X2, thus, trader can consider TP price X2 pips higher than the entry price.
- If a powerful pattern forms in this region, trader can consider the 3rd TP price via this pattern.
SL price can be determined considering TP price that trader selects.
On the graph, after the market price has hit the resistance line 5 times, it crossed the given line towards the bottom, then it returned towards the top.
As a candle formed above the given resistance line, trader could place a Buy order.
TP prices could be determined by the Bullish candle length, the distance between High price of this candle and Low price of candle on the last valley.
However, there was no valid pattern on this region.
SL price varied based on selected TP price.
[adv_thirdsec ]
Significant notifications
- When price declines towards the resistance line without crossing anything, if a powerful Bullish candle forms near a resistance line, then a powerful and reliable Buy signal is generated after price goes higher than that Bullish candle. On the left graph, price could not cross descendant resistance line for a long time, and after it fall near this line, a Bullish Hammer candle has formed. Thus, trader could place a Buy order above High price of the given candle.
- After price passes a resistance line and returns towards it, if a powerful Bearish candle forms on the resistance line, then a reliable Sell signal will be generated. On the right graph, market price has passed the resistance line. Market price could not pass this line towards the top after price returned towards it. An Engulfing candle has formed on this resistance line, thus, trader could place a Sell order.
GBPUSD chart on a Daily timeframe, trader can detect the R strategy on an uptrend.
After the market price had hit the resistance line 3 times, finally it has crossed it towards the top.
Then the market price returned towards the bottom and a Bearish candle formed below the resistance line.
Trader could place a Sell order below this candle. This strategy successfully identifies the pivot point at the end of a trend.
Another example on a downward trend, market price has touched a powerful resistance line, however, this resistance line could not be crossed.
At a certain point near the resistance line, a powerful Engulfing/Piercing Line has formed.
Thus, trader could place a Buy order over the given candle.
There are numerous signals generated by this strategy, like this example.
After 4 hits by the market price, resistance line was finally broken towards the bottom.
A Bullish Engulfing candle has closed over the resistance line, thus, trader could place a Buy order over this candle with TP price 65 pips higher than the entry price.
A powerful Level was here too.
[adv_thirdsec ]
Another example of this strategy on an uptrend.
Market price has touched this upward resistance line 4 times.
Finally, given resistance line was crossed by the market trend, followed by a downward trend.
After a Bearish candle has formed under the resistance line, trader could place a Sell order with an entry price below this candle.
TP prices could be 63 and 84 pips lower than the entry price.
Another example, in which market price had hit the resistance line 4 times and after a breakout it returned towards the bottom.
After this Bearish candle trader could place a Sell order with TP price 85 pips lower than the entry price.
On a downward trend, market price could cross the resistance line towards the bottom after 4 unsuccessful attempts.
After the market price proceeded over the resistance line, trader could place a Buy order over this Bullish candle.
Alongside this strategy, special candle pattern has formed here, too.
TP price could be 97 or 155 pips higher than the entry price.
Market price could increase 220 pips higher than the entry price.
Another example of the R strategy that trader could place a Sell order with TP price 63 pips lower than an entry price.
Trader can utilise this useful strategy on every symbol.
For example, an uptrend on a daily chart, the price has hit the resistance line4 times until it crossed this line towards the top.
After the price has fallen under the resistance line, trader could place a Sell order lower than this Bearish Engulfing candle with TP price 308 pips lower than the entry price.
Another R strategy shows that the previous Sell order could have longer TP price, 650 pips lower than the entry price.
Market price reached that presumptive TP price. Two R strategies alongside each other.
Trader could also place a Buy order over the long resistance line, when a Bullish Engulfing candle has formed.
The 1st TP price of the previous Sell order could be 308 pips lower than the entry price, and the 2nd TP price, considering the other R strategy, could be 650 pips lower than the entry price.
[adv_thirdsec ]
This strategy is applicable on all timeframes.
On the Gold chart, trader could draw the R strategy that generated a Sell order below this Engulfing candle.
TP price could be 394 pips lower than the entry price.
Price decreased to 390 pips lower, around $1171.
This Sell signal was generated against the presumption of some traders who speculated that Gold would go higher after the price has reached $1900.
Trader must practice multiple times to develop the ability to detect this suitable and reliable strategy which identifies reversal or continuation points.
That concludes this session, until next time and another session take care.