Turn Trade strategy is a mechanical trend trading strategy that looks to trade in the direction of the prevailing and dominant trend. Having a mechanical trading system is very important because it gives you independence with respect to the markets since the markets tell a non-stop story and by having a mechanical system it removes the subjective analysis.
Developing a solid mechanical trade strategy is critical to the success of any size trading account. The most important first step is to develop a well thought out logic chain. The best thing about the Turn Trade strategy is that even though it is a trend trading strategy, it tries to buy low and sell high, but it does so in the overall context of trading in the direction of the dominant trend.
The setup makes use of the moving averages which is one of the most popular indicators among traders to gauge the market trend. It also uses Bolinger Bands to discover overbought and oversold conditions in the market and it uses multiple time frame analysis in order to time the market.
As we have established above, we use two sets of technical indicators. Firstly, we use a simple moving average with a period applied to the daily chart. In technical analysis, the day moving average is regarded to be one of the most influential moving averages and since 20 is a multiple of it carries a lot of weight as well.
The second technical indicator used is the Bollinger Bands, which are a volatility indicator utilized to spot overbought and oversold conditions. The Bollinger Bands are used on the 1h time frame and actually the Turn Trade setup requires two sets of Bollinger Bands, one with a three standard deviations 3SD and the second Bollinger Bands with two standard deviations 2SD.
The two bands will form a trading channel that will contain the price action inside it for the most of the time. We can notice that at the first retracement into the lower 2SD-3SD Bollinger Bands a long signal is triggered and both of our profit taking areas have been reached in the following hours. The Turn Trade strategy demonstrates the power of trading with the trend and the advantage of using multiple time frame analysis to time the market.
This form has double opt in enabled. You will need to confirm your email address before being added to the list. Turn Trade Strategy Turn Trade strategy is a mechanical trend trading strategy that looks to trade in the direction of the prevailing and dominant trend. Fundamental Analysis How to Establish a Directional Bias An introduction to the Elliot Wave Principle The best thing about the Turn Trade strategy is that even though it is a trend trading strategy, it tries to buy low and sell high, but it does so in the overall context of trading in the direction of the dominant trend.
Turn Trade Strategy Rules As we have established above, we use two sets of technical indicators. Turn Trade Setup configuration. Newsletter Sign Up This form has double opt in enabled.More...