This strategy and is designed to capture an early move of price when it is starting to establish its trend or market direction for the day. This is applicable to all GBP pairs, especially GBPUSD. The timeframes that you need are as follows:
The Frankfurt Market Opens at 2:00 AM Eastern Standard Time (if 7:AM Gross Median Time) Then the London Market (the giant forex mover) opens an Hour later (8AM GMT). This is the European forex session and forex market starts its day in Europe first.
There are no indicators for this system. You only need to determine the breakout.
Start looking at the 1-hour timeframe.
You need to know the price range from 1:00 EST to 2:PM EST on the 1-hour candlestick
Look for the highest high (peak) and the lowest low (bottom) of the price in that range.
Draw parallel horizontal lines through those two price extremes. This will create a tunnel.
Then switch to a 5-minute chart. A 5-minute candlestick must close outside the tunnel.
a) Place a buy order if it closes above the highest high. Buy order can be at market order or buy stop order. b) Place a sell order if it closes below the lowest low. A sell order can be a market order or sell stop order.
6.) Place your stop loss at least 5 pips outside the tunnel not exactly on the tunnel lines.
7.) Wait patiently on a 5-minute chart and see if the candlestick breaks out of the tunnel and if closes above or below it. Then decide to enter the trade.
Use the 1:3 risk and reward ratio.
You can set target profit at the previous swing high or low.
You can tail the stops by moving the initial stop loss to break even or when market moves by the amount risked and continue to trail stop it behind each new low peaks that form (for a sell order) and higher bottoms that form (for a buy order).
How to install Simple Breakout Forex Swing Trading Strategy?