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Double candle's strategy

 

Double candle's strategy

Hello, fellow-bees, here is my personal trading strategy, very personal and based on patterns, support & resistance and some fundamentals.

It is working pretty well for me, hope it helps at least as an example.

 

DOUBLE CANDLE'S STRATEGY

TIMEFRAME: 1D - FINANCIAL TIME

SIZING: 0.03 LOTS

ALPHA PARAMETER: the price range from the first candle's open to the second candle's close.

SHORT ENTRY

ZERO RULE: ALIGNMENT.
* BBands 20,2: nearest candle's close below the middle.
* TWO CONSECUTIVE BEARISH CANDLES OF WHICH THE SECOND CLOSE IS LOWER THAN THE FIRST ONE.
* Last high Fractal is nearer than the last low fractal.
* CURRENT PRICE (second candle's close) is LOWER than the one of that candle signalized by the last HIGH FRACTAL.


1ST RULE: 2 CONSECUTIVE BEARISH CANDLES
2ND RULE: SL = AT 1ST. CANDLE OPEN + CURRENT SPREAD
3RD RULE: 1st. TP at 2x the Alpha Parameter, it may be 75% that range for JPY pairs and generally for any other pairs except for EUR/USD and GBP/USD
4th RULE: LET THE EARNINGS FLOW FREELY WITH THE TREND UNLESS ANY OF THE FOLLOWING CONDITIONS ARE MET:
a) MANUAL CUT-OFF: whenever there appear 2 consecutive bullish candles.
b) IMMEDIATELY AFTER ANY BULLISH CANDLE, SET your NEW SL AT THE LAST HIGH OF THE LAST RELEVANT BEARISH CANDLE + CURRENT SPREAD.
c) WHENEVER YOU HAVE REACHED AN ALPHA PARAMETER EARNING, SET YOUR NEW SL for ONE of the remaining positions AT THE LAST BULLISH CANDLE'S OPEN.
d) OPTATIVE MANUAL CUT-OFF: at any reversal pattern (as the last candle closes higher than the previous one)
5TH RULE of WARNING: wide awake if any of your 2 candles has reached the very bottom Band from the middle itself! - CORE SUPPORT & RESISTANT LEVELS.


LONG ENTRY: please make sure all 5 rules are respected

ZERO RULE: ALIGNMENT.
* BBands 20,2: nearest candle's close above the middle.
* TWO CONSECUTIVE BULLISH CANDLES, THE SECOND CLOSE OF WHICH IS HIGHER THAN THE FIRST ONE. 
* Last low Fractal is nearer than the last high fractal.
* CURRENT PRICE (second candle's close) is HIGHER than the one of that candle signalized by the last LOW FRACTAL.

1ST RULE: 2 CONSECUTIVE BULLISH CANDLES
2ND RULE: SL = AT 1ST. CANDLE OPEN + CURRENT SPREAD
3RD RULE: 1st. TP at 2x the Alpha Parameter, it may be 75% that range for JPY pairs and generally for any other pairs except for EUR/USD and GBP/USD
4th RULE: LET THE EARNINGS FLOW FREELY WITH THE TREND UNLESS ANY OF THE FOLLOWING CONDITIONS ARE MET:
a) MANUAL CUT-OFF: whenever there appear 2 consecutive bearish candles.
b) IMMEDIATELY AFTER ANY BEARISH CANDLE, SET your NEW SL AT THE LAST LOW OF THE LAST RELEVANT BULLISH CANDLE + CURRENT SPREAD.
c) WHENEVER YOU HAVE REACHED AN ALPHA PARAMETER EARNING, SET YOUR NEW SL for ONE of the remaining positions AT THE LAST BULLISH CANDLE'S OPEN.
d) OPTATIVE MANUAL CUT-OFF: at any reversal pattern (as the last candle closes lower than the previous one)
5TH RULE of WARNING: wide awake if any of your 2 candles has reached the very top Band from the middle itself! - CORE SUPPORT & RESISTANT LEVELS

 

 

Thu, 11/17/2016 - 6:05pm
 
rooseveltkelly

When I began learning trading a year ago, The Double Tops/Bottoms was the first chart pattern I learned. It took me a while and a lot of stop losses to at least to understand what occurs is when price tests a previous high or low and fails, then followed by a up or down move. I enjoyed that types of trades because I could risk a little to make a lot depending on the structure my exit strategy. The Ah-Ah moment came when I realized that this chart formation tended to trade better in range conditions with the prices marked by the low price and a high price. I rarely use it now, but it is good to have several strategies in the tool box
.
Step 1: Locate Re-Tests of a Previous High/Low

The beginning of a Double Top formation is a well-defined swing high followed by price moving down. Another way to describe it is price bouncing off a resistance level. We want to draw a horizontal line at the highest price (wick) of the highest candle.

Step 2: Set Entry Order to Sell Below the Initial Swing High or above the Swing Low

The Double Top / Bottom formation is rarely perfect. Sometimes, price will move up to the exact previous high, bounce, and reverse. But there are also times when price will run past the previous high before reversing, or will reverse before it hits the previous high. Because of this, we have to decide where we want to get into the trade.

I elect to set my entry order a few pips below the previous swing high to give myself a better chance of getting into the trade. It’s the worst entry price of the three different scenarios, but this is made up for with the Risk Management in Step 3.

Step 3: Pick an Exit Strategy

 
Jule Bee

Double Tops/Bottoms is what I've just started to have success with. Thanks for both of your trade info.