Set & Forget Strategy For GBP pairs:
This article explains a simple strategy that can be used by traders when trading GBP pairs. The time considered for this strategy is when market opens for the trading day. A demo account will be ideal for practice purposes before using a live/real account.
One can trade the following pairs successfully with this strategy; GBPUSD, GBPJPY, GBPAUD, GBPNZD, GBPSGD, GBPCHF and GBPCAD.
The time frame on the MT4 chart for this strategy is the Daily time frame. The idea behind this strategy is for traders to place pending orders with take profit and stop loss for the day. There will be no need for monitoring of running trades when using this type of strategy.
GBP pairs are appropriate for this type of strategy due to wide-range price movement.
GBPUSD DAILY 6 APR, 2019 (10:18 GMT):
GBPJPY DAILY 14 MAR, 2019 (8:49 GMT):
How it works:
Basically, at the start of the trading session, the high and the low points of the previous day candle is identified (for example, let us consider a bullish candle with high = 1.28978, and low = 1.27844).
For previous day candle with length greater than 90 pips or less than or equals to 150 pips:
The entire length of the previous day candle body from wick to wick (high to the low) candle is measured. The total number of pips for the previous day candle must be more than 90 pips for this strategy to be applied.
Pending orders of buy stop and sell stop will be placed 10 pips above the high and below the low of the previous day candle (example buy stop is placed at 10 pips above high = 1.29078, while sell stop is placed at 10 pips below the low of the candle = 1.27744).
However, the take profit for both the buy and sell stops will be 100 pips. Stop loss for the buy stop will be at the previous day low (SL = 1.27844) while stop loss for the sell stop, will be placed at the previous day high (SL = 1.28978).
The take profit point for the buy stop order above the previous day candle will be 1.30078 while the stop-loss is 1.27844. On the other hand, the take profit point for the sell stop order below the previous day candle will be 1.26744 while the stop-loss is 1.28978.
As soon as one of the pending orders is triggered, the other pending order can be deleted.
For previous day candlestick with length greater than 150 pips:
There are times when the total length of the previous day candle is more than 150 pips. The take profit will be 100 pips but the stop loss will be placed at the middle of the entire previous day candle length.
For example, if the entire candle length is 300 pips (including wick length), then the stop loss for either the buy stop or the sell stop will be placed at 150 pips distance (somewhere around the middle of the entire candle length).
Currency pairs for this strategy:
GBPUSD, GBPJPY, GBPAUD, GBPNZD, GBPSGD, GBPCHF and GBPCAD.
Daily time frame.
Time to set pending orders:
The best time to set pending orders is at the start of the trading day, shortly after previous day candle closes.
The right candlestick pattern for this strategy:
A well-formed previous day candle body with small wicks is appropriate for this strategy. Do not apply this strategy on the following types of candlesticks; Doji (or half-doji with candle body that is less than 10 pips), or Harami.