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?
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.