Trading strategies can be trend-monitoring or flat. The “Revenge” is a trend strategy and likes high volatility in the market. The trade is conducted with one of the two currency pairs: either EURJPY or EURUSD. The currency pair is selected depending on the current market volatility.
Prepare your working place.
Set two windows M1 and M15.
Zigzag indicator with meaning of 5, 5, 3. The standard settings have the meaning of 12, 5, 5. You must change only first meaning from 12 to 5.
Moving Average(Abbreviated - МА) with the meaning of 33.
That’s all, no more indicators are used.
Change for D1, mark the day extremes from yesterday. Mark today’s opening price too.
The extremes, maximum and minimum of the previous climb are marked with the yellow lines.
The price, the market opens with today, or a new climb on the day graph starts, is marked with the indigo color. We don’t need these three lines out of the air. They are very powerful pointers. There are moments when it’s as clear as a day where to go now. For example the price after the day opening beats its head against the maximum for a long time, not breaking it. Then it bounces and the trend goes down. The same also vice versa. It is the same for the day opening price. These lines help to take a decision about the entrance/exit. Don’t ignore these three lines in any case and always mark them on the graph.
You can download the tool which makes this job for you in the section named “Indicators”.
If you bring the computer mouse on any climb on the graph, you will see the marks in the right, at the very bottom:
O: 1.2233 – the climb opening price. If it is the day climb, so the day opening price is also equal to this meaning.
H: 1.2322 – the upper extreme, the highest point of the climb.
L: 1.2122 – the lower extreme, the lowest point of the climb.
We don’t need any other meaning. Only these three meanings.
Change for H1. Here we mark support and resistance on the tops of zigzag. These are very significant levels. And the answer where to fix the profit can be on one of these levels. You should make/correct these lines every day. After a short training you will make them easily and clearly, you’ll know how and where to line. You should mark the tops sometimes of three – four days before, sometimes a little more, as it is shown.
There will be such a Zebra only at the moment of drawing lines on the timeframe H1, when you change for M15 everything will look much prettier. Now change the graph with markup for M15. That’s all. The preparation is completed. This is how the prepared working place looks like:
It looks slightly small but enough to understand. M1 is in the left, M15 is in the right. The place where the quotation has crossed MA down is marked on the graph M15 below in the left with a bold vertical line: from now on we will work only down.
In the right of the graph M15 we will work only up.
Breakdown with the average M1 intercept,
further there is a small pullback,
The inlet to the breakdown of zigzag is towards the middle of the breakdown of a pending Order. The inlet point is marked on the graph with number 4.
The pullback has had place, now we expose the pending order.
In the situation in the picture we work down only if the quotation in M15 is situated below MA 33. Take the previous low place of zigzag (it’s lined with a red line), subtract 1 point, you will get the order opening price; add 12 points. You will get the stop loss. Set the stop loss, set the order opening price. And only after that set the order. After the order setting put a trailing stop of 15 points immediately.
Up – specularly. Take the previous top of zigzag, it’s lined with a short red line, add 1 point and the spread, for example your spread is 3 points, so we add 4 points, you’ll get the order opening price, subtract 12 points, you’ll get the stop loss. Set the stop loss, set the order opening price. And only after that set the order. After the order setting put a trailing stop of 15 points immediately. The work can be done only with the pending orders. Attempts to catch up with the movement, if you didn’t have time to place the order, or attempts to enter the market usually end in failure. Only with the pending ones. If you didn’t have time, skip the entrance. Believe me, there will be many more. It’s better to skip than to grab bad.
The stop loss for EURUSD is 10 points, for EURJPY it’s 12 points. I don’t set take profit, it depends on volatility. The profit mustn’t be less than 10 points anyway. 10 points of the profit are bad. Transfer to breakeven at 5 – 8 points more. Knowledge when to close position will come with experience. But don’t think it’s an abstraction. To help you here is our marking, maximums/minimums, day opening, support/resistance.
Examples of transactions. I didn’t go far and just took the current situation. The entry points are marked with the red lines. You can see in M15 that we are up the MA 33.
The quotation is below MA 33. We work down.
I have shown several entrances intentionally, not only one right after the breakdown of MA 33. At the initial stage your task is to learn to work out only the entry immediately after the breakdown of MA 33. The next entries you will practice with the advent of experience. And again, we will examine the volatility at the moment, how much the trend has passed, etc.
We are above the yesterday’s upper extreme. Today’s opening price is very close to the yesterday’s maximum. In M15 we are above MA(average). The situation is crystal clear – we work up. Down we work specularly. And we expect exactly crystal clear situations. You also have to learn the art of expecting profitable transactions. If anything is incomprehensible, unclear or suspicious – then we pass the transaction. Sometimes I pass a day or two or a week, but I wait for my trend and I work.
With the help of this graph I want to show what I meant saying that sometimes it’s clear where the quotation will go. Here is a look. The day opening price is marked with indigo color. The vertical line stands at 24:00. That’s the beginning of the next day. The quotation has broken this level, the day opening price and never returned there. So it was clear that we will go up today. This is a currency pair EURUSD M15. I took intentionally today, not to make an impression that I’ve chosen some more convenient graph and the most convenient place.
I always look at what time the market is the most volatile. And depending on this I work either in the daytime or at night. It’s easier to work at night for me just because I see where I go in relation to the day opening price. I have developed my biggest deposits exactly at night. Such trading strategies as “Revenge” work perfectly also in the Asian session, the main thing is volatility. So when the day opens I wait a little when the market is determined and then I work from the day opening price. There can appear a question about the time difference. I take the day opening price in GMT. Accordingly 24:00 by GMT.
Then between 7:00 and 11:00 the market gave us a unique opportunity again, clearly noting the day opening price again and building on it. At such moments just try to manage to increase the deposit, considering all the rules described above. And such opportunities happen almost every day. The same is true for the extremes of the previous day.
With the coming of experience you will see more and more potentially profitable patterns.I’m going to show some of them.
Breakdown on average price,
then a little pullback, the exact contact between the average price and zigzag with this pullback.
Zigzag can be drawn later, after the price touched MA and went in the opposite direction. With the coming of experience, you will learn to see it.
The entrance to the breakdown of zigzag is towards the breakdown of the average on pending order. The touch of the price and MA has happened, put the pending order. Don’t forget to work towards M15.
Up – specularly.
Here is one more pattern for the Forex strategy “Revenge”. I emphasize, you can start working with this pattern with the coming of experience. It is quite reliable, so is the described above. Gradual lowering of the climbs, sometimes it’s such a rounded lowering. The climbs are small, sometimes 2-3 points, no shadows in the opposite direction of movement. As a rule the result is good movement. You must enter the same way as it is described in the main strategy with pending order. Before this pattern forms there was quite good volatility.
Don’t enter the market if the slightest condition of rules is not fulfilled. With the coming of experience you will learn to define the volatility fit for work with the “Revenge” trading strategy. We work with this kind of volatility:
The working situation:
You should start working only with the demo account. You should move to the real account only after you learn to triple your demo account in a month or less. And you should achieve it not only once but several times. No, I haven’t gone mad. Relieve yourself of the break. Forget about the stereotypes. You can multiply the deposit in one month! I managed to do it all by myself. To invent this system. To run-in to it. You have it in your hands. I managed and you will!!! After you learn to triple the deposit on demo in a month almost on autopilot, in real this alignment promises you a profit of at least 100% a month. Further, with the coming of experience on the rise.
On Monday always start working carefully. Your eye is usually blurred a little after the weekend. It doesn’t mean you shouldn’t be careful in other days.
10 profitable transactions give 100-140 points in average. It is like if two went to a restaurant, one of them ordered a cup of coffee, the other a goose – they ate enough in average. What I wanted to say is: there will be moments when one transaction will bring 100-140 points. DON’T BEND OVER IN THE FIRST THREE DAYS OF WORK to achieve such results. You’ll have profits of 100-140 points a day. Not immediately but you will for sure. The trading strategy presented here is reliable enough itself. DO NOT CLIMB THE REAL until you learn to increase the deposit on demo in three times minimum a month. It’s easy to increase three times, as if it should be so. And it really should. Better 5-6 times. And only then – to real.
MM (Money Management). With the deposit equal to 1.000 currency units, at the foot of 10 points and the working lot of 0.3, the potential loss will be equal to 30 currency units, what will be equal to three percent of deposit. We risk three percent of the deposit in each transaction, what is very, very affordable. For easy counting of the working lot you can use the table, which you can download in the section named “Indicators”.
The next: Never, never, never place or open the order, not having set the stop loss in advance. Next: With the take profit. Look for the DC (Dealing Center) where you can put the stop loss 2-3 points away from the price. In general I recommend FiboGroup of the DC. The working conditions are optimal in Fibo.
One more method: you already have the profit of 20 points and you are thinking of closing the position. You put the stop loss of the current price 3 points away. If it goes in the opposite direction, you’ve got +17 points. If it goes further – excellent. After the order’s working always put the trailing stop of 15 points. I close very seldom in trailing and put it only for the occasion of abrupt movements.
To make it automatically you must make everything the same way in the period of training on the demo account as you will do it on the real one. Set the stop loss, set the price, set the pending order and immediately set the trailing stop. At the trades time on the real account you will not have time to be distracted by this activity, everything must go automatically and mustn’t take your attention during the trading with the trading strategy.
If you have series of failures (on the real) for 2-3 days of 2 losses together – STOP. Change for the demo, 2-3 days on demo. If you feel in shape – to real. If not – again to demo. Maybe the activity in the market has gone down, maybe the global trend has finished and/or the correction has become. Next I’m going to explain how to define the necessary activity of the market on the day graph.
The majority of the people’s questions are about the volatility. How can we define it? Which of the volatilities is the most appropriate for the “Revenge” strategy? The day graph of the currency pair will help us. Look at the size of the day climb. If the day climbs are about 60-100 points – it’s not the working situation. In such periods you will have only losses.
We see the clear powerful trend. The day climbs are about 200-300 points, what is equal to the time for the Revenge. It means you can’t work with this strategy all the year round, but only in the periods of high activity in the market. You should take very seriously the definition of the volatility and of the current situation in the market. Maybe it is the key moment for the success with this strategy.
One more advice. I understood that on the minutes I must think out quickly and I was training to make everything automatically very long. I took three demo accounts and worked on the three together. So I put the orders on the three accounts together. When I changed for the real, I continued conducting one more demo account with the real. Well, it’s not necessary now. But, how can we know, it held me on my toes all the time, not to yawn.
I warn you again, the “Revenge” requires high concentration, strong nervous tension, high level of self-discipline, balance your power.
Although it is obvious I still make the reservation: this Forex strategy is good only for the people who can give all their working time to trading, who don’t have second job. If you are not one of them yet, look at the next strategies.