This classical forex strategy employs trendlines and forex formations that can be effectively used with trendline breakout. It is efficient forex strategy with emphasis on quality, not quantity of trades.
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Identify the trend tunnel. If necessary use fractals or zigzag indicator for better visualization.
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Wait for trendline breakout (ideally against current trend).
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After breakout wait for pullback formation – price testing the trendline that just got broken.
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When pullback formation returns to its base , enter the trade and place protective stop loss couple of pips above pullback formation.
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Take profit. It is recommended to use width of the tunnel as take profit.
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Focus on the quality of signal !
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TIP on drawing trendlines:
Trendlines are not really lines, they are zones. There is no accurate way to draw them as lines. It is good to draw multiple trendlines. On highs, on lows and also on the price smoothed by MA. For this example EMA 4 was used.
