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Blunt bumping is one of the trading strategies that do not offer many entry opportunities in a year, but if there is one, then everyone can probably make a lot of money on these trades.
In the end, it does not matter here whether the trader trades with small capital or vice versa. The price formations that form the basis of this unique strategy can be traded with both shorter and longer Profit-Targets, which is an undeniable and great advantage of this strategy.
Strategy entry rules
Entering long positions
-After a long falling candle with a short or no lower wick, a rising candle is formed, which also has a short or no lower wick and its closing value is located approximately halfway down the body of the previous candle.
Entry into short positions
-After a long rising candle with a short or no upper wick, a falling candle is formed, which also has a short or no upper wick and its closing value is approximately halfway down the body of the previous candle.
On the chart below you can see the trading situation in which the formation that is part of today's trading strategy was formed. In a brief summary, there was first a relatively long rising candle, followed by a falling candle, which after closing met all the entry parameters (see above - entry strategy rules). Thus, immediately after the opening of the following candle, it was possible to start entering within the strategy, with the Stop-Loss (LS on the chart below) usually placed on the high/low of the long candle (see below) and in the case of the Take-Profit placement, it then depends on what ratio between SL and TP the trader chooses. In general, the higher the ratio chosen, the higher the risk of the price not reaching the Take-Profit.
As already mentioned, Blunt Bumping is one of the trading strategies where entries are made only a few times a year, but when a trading opportunity does arise, the value of successful trades made in this way can range from 60% to 80%.
