Forex Strategy «3 touch»

Alpari Broker

Often the conclusion of transactions for the BUY of the uplink and deals for SELL in a downtrend, most FOREX traders do not coincide with the trend, which is present in the moment on the market. Note that we do not consider the situation where the trading process is in the process of emergence of the trend.

In this strategy forex «3 touches» we’ll talk about how to conduct themselves within the existing trend in the market. And in this case the best moments of entering the market based on the use of trend lines using a support or resistance, which are determined by the last completed trends.

Forex Strategy «3 touch» works well on day intervals as well as hourly and 30-minute and on all currency pairs.

I suggest you consider the 2 best points that allow a deal with a fairly high probability of profit with a relatively low probability of risk in the current market trend. In each, we will use the limit orders (Buy Limit and Sell Limit), and only sometimes — the transaction will be on market orders, and then if this would be a very good reason.

Consider point 1Conclusion of the transaction for the BUY of the line of the uptrend in the 3 in contact with him.

We have deal with a rising trend, if the successive maxima and minima increase. We thus have the opportunity to a rising line on the 2 nd minimum price, which have an absolute bottom for at least 2 previous and 2 subsequent candles.

In this situation, the best moment to make a deal for the purchase occurs when 3 touch prices rising trend line. At this point, of course, need to buy — and be sure to buy (see fig. 1).

Stop-loss when it is necessary to put:

  • at closing on the limit order — for 2-nd or below the line of least resistance by 20-30 points (the same can be below the important Fibonacci level)
  • Entering the market on a market order during the formation of reversal candles and rebound from the resistance line (and always at the close of the candle on the selected time interval) — below the line of resistance and therefore lower the candle at 3 touch at 10-15 points (depending on the selected currency pair and time interval).

TP are defined by Fibonacci extension or Design your on an important local maximum, or not stavte, and use the trailing stop and close the deal in parts.

Using this strategy, trade, you must first determine price levels. Undoubtedly the best option — to use for this day price charts, where each of the past days will have its own price level. More accurate reconciliation can be carried out, using for the H1 or M30 price charts.

Forex Strategy "3 touch"

Figure. 1. Puncture the rising trend line within a given day could not develop, and the closure occurred above the trend, thus confirming its continuation. Anyone who has not had either been afraid to make a deal within days, still had a chance to enter the market in a growing market for its long side and in subsequent trading days, although the effect of this was certainly smaller, and the level of stop-loss larger.

In this strategy, Forex trading adversely affect the result of false punctures, which create the illusion of breaking through the trend line. I admit the truth or falsity of this breakthrough can not be up to the moment when the candle is made a breach in the trend, will not be closed, and will not start haggling next — so you always wait for the closing of the candles, and only if a reversal candle — enter the market. A good support for open positions may be just as signals of oscillators (divergence, as well as increased volume, with the third contact and rebound — which increases the chances of concluding profitable deal).

Usually, if the trend in the market is strong enough, the price to the closing of the candles, returned to him, and it is often possible to observe that the closing price is almost exactly on the trendline. The chances for a successful conclusion of the transaction to purchase only increased: while even if the break below the uptrend will happen, it happens, he has certainly not today, and the price the market will have some time to fluctuate around a given point, indicating a periodic force then weakness.

Point 2 — Sale of the falling trend line at 3-m touch with her.

This point — an absolute mirror image of the transaction at the point 1.

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Comments (2) on "Forex Strategy «3 touch»"

  1. […] of the total downward movement, with a maximum of 9 February 2012 + top white line of the channel (third touch). After this is all clear all clear to bottom — the orange line of the channel and close the day […]

  2. […] Gray trend line constructed on last week — quite possible hang down, as it is the third touch prices. Also at this same level is a dark blue long-term trend line. Relative to it we are interested in […]