Simple Entry Methods of Trend Hunter Strategy
One of the most important parts of each strategy is the entry method. Since 20 years ago, the Trend Hunter strategy has proved that very accurate and trusted entry methods have been one of the most important reasons for its success.
The signal to enter the market is when the price forms one of the reversal patterns of "Hammer/Shooting Star" or "Trough/Peak" following the retest of the "Buy or Sell zone," in other words, it doesn't mean to enter the market when the price comes to these zones but then we wait for forming any of reversal patterns.
Although it's not difficult to distinguish "Hammer/Shooting Star" or "Through/Peak" patterns, using the "Daily Trading Opportunity" signal service will save you time and observe forming these patterns in a faster way. In addition, this service also shows the strength of each pattern, and in fact, the probable rate of success for any of the formed patterns is shown, so you can easily decide how much to invest in different patterns.
"Intraday Forecasts" service can also denote more accurate entries. But it's not simple to trade in intraday time frames - since there are lots of noises in price movement - so we advise only professional traders to enter the market for Trend Hunter Strategy using intraday forecasts.
Entry methods for Buy trades
When the price enters or touches the "Buy zone," if one of the "Hammer" or "Trough" patterns is formed in the daily price chart, one can enter the market with Buy orders.
Example: In Figure 1 for USD/JPY currency pair, the Buy zone well expressed its role in supporting the price against more losses for a long time. Four troughs and a hammer were formed when the price tested this support zone. After forming any of these patterns, we entered the market with buy orders. We earned small profits limited to 100 to 200 pips, but as seen in Figure 2, finally, after forming the trough during the last entry, the uptrend began, and we could earn a huge profit.
Buy trade result:
As seen in Figure 2, after forming a Trough and entering the market with Buy trades on 2014-07-02 uptrend began. This trend could generate a profit of 11,327 pips in 112 days.
See Figure 3 for the signal of forming a trough by the "Daily Trading Opportunity" service.
As seen in Figure 3, the "Daily Trading Opportunity" service on 2014-07-02 indicated forming a Trough with a strength of 32.
We enter the market with buy orders by forming a Trough after the price hits the Buy zone.
Entry methods for Sell trades
When the price enters or touches the "Sell zone," if one of the "Shooting Star" or "Peak" patterns is formed in the daily price chart, one can enter the market with Sell orders.
Example: In Figure 4 for the EUR/USD currency pair, the Sell zone expressed its role in resisting the price against more gains for a long time. Three peaks and a shooting star are formed when the price tested this resistance zone. After forming any of these patterns, we entered the market with sell orders. We earned small profits limited to 100 to 200 pips, but as seen in Figure 5, finally, after forming the shooting star and the peak at the same time, during the last entry, the downtrend began, and we could earn a huge profit.
Sell trade result:
As seen in Figure 5, after forming a Peak and Shooting Star at the same time and entering the market with Sell trades on 2014-05-09 downtrend began. This trend could generate a profit of 10,287 pips in 150 days.
See Figure 6 for the signal of forming a peak and shooting star at the same time by the "Daily Trading Opportunity" service.
As seen in Figure 6, the "Daily Trading Opportunity" service on 2014-05-09 indicated forming a Shooting Star with the strength of -66 and a Peak with the strength of -82 simultaneously.
We enter the market with sell orders by forming a Peak after the price hits the Sell zone.
Tip 1: Entry on early Monday
If any of the patterns for entering the market was seen on Friday, it's better to enter the market when it opens on Monday instead of when it closes on Friday.
Benefits of this tip:
- Avoid unnecessary "Overnight Swap fees" for Saturday and Sunday.
- There is always a risk for Saturdays and Sundays if incidents like wars, terrorist attacks, natural disasters, election results, and political events could highly affect the market. Therefore, it's better to avoid this risk and enter the market at the beginning of Monday if there is no important event in these two days and the market opens without GAP!
- Review new forecasts published on Saturday (sometimes on Sunday) and make sure the market conditions are not changed. We may also use the newest take profit targets introduced in these forecasts.
In this situation, for Friday night of that week, no buy and sell sign of entering the market will be displayed on the chart. However, we will enter the market on Monday morning if no incident in these two days could influence the market. Therefore, a buy or sell signal will be displayed on the next week's chart.
Tip 2: Entry signal near Buy or Sell zones
As you know, Buy and Sell zones are approximate. Although the professional team of Forecast City, with more than 20 years of experience, tries to draw these zones as accurately as possible, the uncertainty in all financial markets may sometimes result in reversal patterns forming before the price touches or enters these zones. In these situations, if the minimal distance between the price and the beginning of the zone is less than half of ATR264, we can still invest and hope the trend begins.
We advise studying carefully the articles "Forming Hammer/Shooting Star patterns" and "Forming Trough/Peak patterns" in DTO (Daily Trading Opportunity) section.