RECOVERY TRADING METHOD

Here we will have 2 rules for Long and Short as follows:

  • The Long Rule:

1. At least 3 consecutive candles are bearish candles

2. It is followed by a candle that closes higher.

3. Place BUY stop on top of that candle

4. Set take profit at 50% of the previous bearish wave (pull the Fibonacci)

  • The Short Rule:

1. At least 3 consecutive candles are bullish candles

2. It is followed by a lower close candle.

3. Place the SELL stop at the bottom of that candle

4. Set take profit at 50% of the previous bullish wave (pull the Fibonacci)

Seems simple, right, now let's see some examples to better visualize it.

As we can see this is a Short setup with three consecutive candles of the bullish candlestick followed by a bearish candle that closes lower while the reversal touches the downward trendline drawn from yesterday. Therefore, the Short setup is in progress, and we can enter a Short order when the breakout is above the low of the red candle.

We see an example for GBPJPY - a pair that is notoriously active in killing traders.

Here is a Short setup for the GBPJPY pair:

So with just a simple model like this, we can turn it into a delicious setup. However, due to the unpredictable fluctuations of the market and the difficulty of brothers to control the movement of the price, this setup must be combined with other tools such as Bollinger Bands or RSI or even with other methods. To help you make the most accurate decision, the highest success rate instead of relying on this model by Mr. Thomas Bulkowski alone.