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Forex Daily Topic Forex Price Action

The H1-15M Combination Trading Has a Lot to Offer

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

The above image displays the H1 chart. The chart shows that the price gets caught within two horizontal levels. At the last bounce, the chart produces a bullish engulfing candle and heads towards the North. The sellers may wait for the chart to produce a bearish reversal candle at the level of resistance. On the other hand, the buyers are to wait for a breakout at the level.

The bull wins. A good-looking bullish candle breaches through the level of resistance, closing well above the level of resistance. Some traders may trigger a long entry right after the last candle closes. Some may initiate their long entries by setting limit order above the level of resistance. Every strategy has some advantages as well as disadvantages. Anyway, we are going to flip over to the 15 M chart to trigger an entry.

This is how the 15M chart looks. The last candle closes as a bullish candle too. This suggests that the bull has taken control. The H1-15M combination traders are to wait for the price to consolidate and produce a 15 M bullish candle to offer them a long entry.

The chart produces a bearish engulfing candle followed by a bullish engulfing candle. The buyers (H1-15M combination traders) may trigger a long entry now. The stop loss is to be set below the level of new support (breakout level), and take profit may be set with 2R. Let us proceed to the next chart to find out what the price does after triggering the entry.

This is the H1 chart. The chart shows that the price heads towards the North with good bullish momentum. The buyers achieve their 1R with ease. The point we may notice that the price never even comes back to the breakout level again after triggering the entry.

By using the H1-15M strategy, traders can get an excellent risk-reward. It offers a high winning percentage as well. In most cases, the price heads towards the trend’s direction with good momentum. On the contrary, the 15M chart may not always consolidate and produce the signal candle. Thus, traders may not get as many entries as they would like. However, since it is the H1-15M combination, it still offers a good number of entries per week in major pairs.

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Forex Price-Action Strategies

A Thing You May Notice in the H1 Breakout Strategy

We are going to demonstrate an example of the H1 breakout strategy in today’s lesson. Usually, the H1 breakout strategy does not make traders wait too long to hit the target. However, if the breakout level is a double top or a double bottom level on the H4 chart, the price gets even more momentum to hit the target. Today’s breakout level is a double bottom level on the H4 chart. Let us now find out what happens after the breakout.

After making a bearish move, the price makes a correction. The last candle on the chart comes out as a bearish engulfing candle. This means the price finds its resistance. If it heads towards the swing low and makes a breakout, price action sellers may jump into this chart to make some green pips by going short in the pair.

The last candle makes a breakout at the level of support. This is an explicit breakout. Please note that the price bounces at the same level earlier. This means this is a double bottom support level on the bigger chart. This is an H1 chart. Thus, this must be a double bottom support level of the H4 chart.

The next candle closes below the breakout candle. It confirms the breakout. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above the level where the trend starts and setting the take profit with 1R.

The price heads towards the South with extreme pressure. The price is about to hit the target on the next candle after triggering the entry. It does not, but the sellers get their message. A strong bearish candle like this suggests that the pair would remain bearish at least for two more candles. That would be enough to hit the target.

The chart produces a bullish inside bar before hitting the target. If we count, it takes only three candles to hit take profit level. As mentioned, the H1 breakout strategy hits take profit level in a hurry. So does this one. If we calculate the next candle after the signal candle, we see that the candle comes out as a very strong bearish candle and generates strong bearish momentum. This is often seen when the H1 chart makes a breakout at a level, which is a double top or double bottom level on the H4 chart too. We do not need to concentrate on this if we aim to trade on the H1 breakout strategy. However, noticing such things help us be better traders to some extent.