This strategy uses one of the common forex chart patterns called the bullish pennant to enter into a long trade or buy trade.
The bullish pennant pattern method purely uses price actions and no indicators added.
This pattern is formed when you draw 2 converging trendlines. There must be an existing uptrend for a bullish pennant pattern to form. For a bearish pennant chart pattern to form, there has to be an existing downtrend. The formation of a bullish pennant pattern shows a period of market consolidation. To break in this formation upside gives us an idea that the trend is continuing to go up.
Use this strategy on a 1-hour and above timeframes.
The market must be in an uptrend then wait for a market consolidation for the bullish pennant pattern to form.
Then, draw the 2 converging trendlines.
Wait for fo the price to break the downward trendline. and the candlestick must close above the downward trend line.
Place a buy stop order 3-5 pips above the high of that candlestick.
For stop loss, place it 5-10 pips below the low of that candlestick.
Take profit on the previous swing high or 3 times what you risked. You can also lock in profits by moving stop loss and trailing or behind the bottoms that form as the price continues to move up.
This is purely price action, no need for indicators.
It allows you to get in a trade if you miss the beginning of the uptrend.
Can gain good profits in a strong trending market and occurs regularly in all timeframes.
The breakout can give you a very long candlestick, it means that your stop loss can be quite large.
Hard to identify the pattern if you are not focused.