FALSEBREAK CANDLE TRADING STRATEGY
"Trading Strategy using Support and Resistance Levels plus a Falsebreak Candle as a trigger"
■ Style: Day-Trading Strategy
■ Name: Falsebreak Candle Trading Strategy
■ M5 timeframe (5-minutes)
■ 5-7 daily trades
INDICATORS & SETUP
This simple strategy uses no indicators instead it uses the close support and resistance levels and a falsebreak candle.
■ Support and Resistance form a basic demand and supply price range
■ A Falsebreak Candle provides the trigger to trade it
This is how you may implement the Falsebreak Candle Strategy:
First of all we must define the range by determining major support and resistance levels.
■ (↑) Long Trades
1. Wait until the price of an asset reaches an important support level.
2. Wait until there is a candle with a shadow below the support level and a close above the support level. This is called a falsebreak candle.
3. As the falsebreak candle is confirmed open a Long Trade.
■ (↓) Short Trades
1. Wait until the price of an asset reaches an important resistance level.
2. Wait until there is a candle with a shadow above the main resistance level and a close below the resistance level. This is also a falsebreak candle.
3. As the falsebreak candle is confirmed open a Short Trade.
■ Take Profit: 200-250 pips
The Take-Profit depends on the extend of the range between support and resistance. Take-Profit is placed 5-10 pips below the resistance in case of a Long-Trade and 5-10 pips above the support in case of a Short-Trade.
■ Stop-Loss: 80 pips
The stop-loss is placed below a falsebreak in case of a Long-Trade or above the falsebreak in case of a Short-Trade
■ Profit/Loss Ratio: 2.5
CHART: Falsebreak Candle Strategy
■ Falsebreak Candle Day-Trading Strategy