Trading System “Green Red Candle” — Perhaps It Is What You’ve Been Looking For

Greetings, fellow traders. Let us recognize, simple Forex strategies work better than complex. I think you heard this and probably have already experienced.

What do we know about the price? 1) It can move down, it can move up. 2) Trend tends to continue. What can we do with this knowledge? It turns out that a lot of things. Surely you knew about this approach or suspected that there is an approach. But you thought: “No, it’s too easy. This cannot be”.

It can. Meet — strategy Green Red Candle, all the power of the incredible simplicity of the system in action.

 

Characteristics of Green Red Candle strategy

Platform: Any
Currency Pairs: EURUSD, GBPJPY, XAUUSD, GBPUSD, EURJPY, USDCHF
Timeframe: D1
Trading Time: once a day
Recommended Broker: Roboforex

Reference section

• How to place pending orders
• Forex GAP’s
• Fibonacci levels

 

Rules of entry

If the daily candle closed opposite color to the previous candle, put a pending order in the direction of new movement by 1 pip above/below High/Low.

Stop Loss and Take Profit

Set Stop Loss about by 5 pips below/above the opposite Low/High.

Set Take Profit at the level of 200 Fibonacci, stretched from the extreme points of the signal candle. I.e. TP is essentially equal to Stop Loss.

 

Variants of exit

For exit, you can use Trailing Stop equal to 160 Fibo (0.6 of Stop Loss) or

— Trailing Stop equal to 175 Fibo and TP increased to the level of 300 or 400 Fibo (Stop Loss multiplied by 2 or 3 respectively)

• Partial close, move to breakeven — at your discretion.

 

Money Management

As you work with multiple currency pairs, do not forget about total risk. 10% of deposit for all pairs is maximum. So, if you decided to use the total risk of 6% for 6 pairs, risk for each position should not exceed 1%.

In addition

— if there is a new signal in the opposite direction when open transaction, we do not close the old one, we set new pending order

— if the order is not active during the day — we deleted it

— if the order is not activated for 2-3 days —we do not trade this pair, wait for a new direction, termination of flat

— we do not pay attention to the news, we can increase TP up to 300 Fibo on the day of the news

— if we lose 3 days in a row, we can double the lot on the 4th day

— we do not trade on Friday night, wait for the opening of the market (to avoid GAPs)

— if daily candle did not pull up to the take profit just a little bit and closed, it is better to exit this position, albeit with a slightly smaller profit.

 

Summary

Green Red Candle trading system demonstrates the power of classic KISS (Keep It Stupidly Simple) approach, i.e. the maximum simple trade. You should pay attention to money management because when you’re working with pairs that have big Stops, it’s easy to go into drawdown. You may want to consider using cent accounts if you have a small deposit.

Take care, Michael

Forex Trader Portal