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.
