There’s another way I also use to trade the trendline trading strategy, and I do that by using the aggressive method.
So what is the forex trendline trading strategy aggressive method?
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Forex Trendline Trading Strategy Aggressive Method Explained
With this method, as soon as price hits a trendline,
- you immediately buy or sell at market prices.
- you do no wait for forex reversal candlestick patterns signals
Currency Pairs to trade: Any
Timeframes to trade: any
Forex Indicators: none required.
If you’ve been trading for a while, you will notice that sometimes, when price hits a trendline, it immediately bounces up or down…price responds promptly to the trendline, respecting it.
So if its a downward trendline, price hits it and immediately moves down.
If it is a upward trendline, price comes down and hits it and immediately moves up!
Knowing this behavior, we can buy or sell immediately when price touches a trendline, anticipating that price will move away from from the trendline as soon as it hits it.
- draw a trendline. If you don’t know how, click this link: how to draw a trendline.
- wait for price to come to the trendline.
- as soon as price hits the trendline, sell or buy at market price, immediately.
- place your stop loss at 30-40 pips if you are trading based on the 1hr timeframe and above.
- for take profit, use risk:reward ratio of 1:3 or use previous swing lows/highs as take profit targets.
- In the daily GBPJPY chart below, you can see that a downward trendline was draw.
- price came and touched it and fell making a 760 pips move.
- if you sold as soon as the trendline was touched, you would have sold at the very top!
Advantages of The Forex Trendline Trading Aggressive Method
- quick profits when price responds as anticipated.
- ability to move stop loss to breakeven quickly,creating a risk free trade.
- enhance your risk:reward
- ability to buy at the bottom and sell at the very top!
- ability to pyramid…adding on more trades.
Disadvantages of the Forex 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 telling you that you shouldn’t be buying. Or selling when all you see is a green (bullish) candlestick telling you that you shouldn’t be selling.