Today we will consider a fairly simple, but quite working Forex & Crypto Trading Strategy «2 + 2». The strategy was originally intended for the daily interval, but at the moment a large number of traders have switched to the hourly interval with it. This is probably due to the small number of signals on the daily chart. The trading system gives signals both against the trend and along the trend, however, statistically, the signals are processed in the same ratio in both directions.
Some statistics:
From January to October 2017, the strategy at risk per trade of 3% (original recommendation) showed a result in the form of a profit of 144%. The maximum drawdown is 12%. The recovery factor is quite high due to the stop/profit ratio, which is 1/3.
- Currency pair — can be any, however, we only checked the GBP/USD pair, since this pair was indicated in the very initial version of the strategy.
- Time interval — H1.
- There are no indicators.
Conditions for BUY according to the Forex Strategy «2 + 2»:
1) Two consecutive black candles are formed on the market (there may be more).
2) After that, two white candles are formed in a row.
3) The first black candle should not show the minimum of the whole given configuration.
4) The second and third candles should not show a rebound in the opposite direction and have pronounced sell tails.
5) The fourth candle (the second white one) should also not be a breakaway with a tail on top.
6) If these conditions are met, then a buy trade is opened at the opening of the next candle.
7) Stop loss below the last low. If the stop is less than 20 points or more than 40, then this trade is not considered.
8 ) After passing in the positive zone a distance equal to the size of the stop loss, the transaction is transferred to breakeven.
Also, wherever the price is at the close of the day within which the deal was made, the position must be closed at breakeven. This condition must also be observed in those moments when the price is in the negative zone (TP is moved to the entry level).
9) Take profit is three times the size of the stop loss. It is also recommended in this case to apply the rounding rules (32 stops is 30 x 3, hence the profit is 90 points: 37 stops is 40 x 3).
Addition:
It is also important that the white candles are not too small in relation to the last black candle and do not show a moment of short-term correction (both are at the very bottom of the last black candle).
SELL conditions:
1) Two consecutive white candles are formed on the chart (there may be more).
2) After that, 2 black candles in a row are closed.
3) At the same time, the 1st white candle should not show the maximum of this entire configuration.
4) The 2nd and 3rd candles should not show a rebound in the opposite direction and have clearly defined buy tails.
5) The 4th candle (2nd black) should also not be a bouncer with a bottom tail.
6) If all the above conditions are met, then at the opening of the next H1 candle, a sell deal is concluded.
7) Place a safety stop loss above the last high. If the stop size is less than 20 points or more than 40 points, then this trade is not considered.
8 ) After passing in the positive zone a distance equal to the size of the stop loss, the transaction is transferred to the breakeven level.
Also, at the close of the current day, within which the transaction was made, wherever the price is, the transaction should be transferred to the breakeven level. This condition also applies to cases when the price is in the negative zone (in this case, the TP is simply rearranged to the entry level).
9) Take profit must be set at a distance three times the size of the stop loss. It is also recommended in this case to apply the rounding rules as for purchase transactions.
Additional terms:
It is also important that the black candles do not turn out to be too small in relation to the last white one and would not show the moment of a short-term correction (both are at the very top of the last white candle).
Video version of the forex strategy «2 + 2»:
- I don’t attach the template, because there are no indicators in the strategy.
- Test for 9 months — HERE >>
