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EURUSD Trend Reversal D1 Strategy is a trading strategy for the EURUSD currency pair, characterized by its simplicity and efficiency. This strategy does not require the installation of any auxiliary tools. It is based on the analysis of candles. The only drawback of this trading system is a small number of entry signals. However, this does not detract from its effectiveness in trading.
This trading strategy refers to the so-called breakdown systems, but its difference is that when working with it, breakout orders can be placed both in trend and against the trend, depending on the type of candle.
Conditions for a BUY deal
If the situation satisfies these conditions, then at the opening of the next daily candle, a BUY STOP breakout order is placed at a distance of 100 points (five-digit) above the opening price.
Conditions for a SELL deal
When these conditions are satisfied - at the opening of the next day, a pending SELL STOP order is sent out 100 points below the opening price of the candle.
Stoploss and Take Profit of EURUSD Trend Reversal D1 Strategy
This trading strategy has clear terms for setting stop-loss and take-profit.
Stoploss is set at a distance equal to half the total size of the closed day candle (not body) from the deal opening price. Takeprofit is set at a distance equal to the full size of the closed day candle.
Conclusion
It often happens that the price does not go further along with the trend, but only updates the extreme of the day and rolls back, up to a reversal. Breakout orders that are set against the trend are usually much more confident, and it is much easier to get profit on such orders. Since take profit is always twice as large as to stop loss, and breakout’s orders are often placed in extreme areas - this strategy can be a very good way to make profits for a trader.
