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Simple Entry Methods for Trend Hunter Strategy

One of the most important parts of each strategy is entry methods. Since 20 years ago, the Trend Hunter strategy has proved that very accurate and trusted entry methods, has been one of the most important reasons of its success.

Signal to enter the market is when the price forms one of the reversal patterns of "Hammer/Shooting Star" or "Trough/Peak" following retest of "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, but using the "Daily Trading Opportunity" signal service will save your time and observe forming these patterns in a faster way. 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 price enters or touches the "Buy zone", if one of "Hammer" or "Trough" patterns is formed in daily price chart, one can enter the market with Buy orders.

Example: In Figure 1 for USD/JPY currency pair, Buy zone well expressed its role supporting the price against more losses for a long time. Four troughs and a hammer are formed when the price tested this support zone. After forming any of these patterns, we entered the market with buy orders and earned small profits limited to 100 to 200 pips, but as seen in Figure 2, finally, after forming the trough during the last entry, uptrend began and we could earn a very big profit.

Figure 1. Buy entries for Trend Hunter Strategy.

 

Figure 2. Buy entry based on trough for Trend Hunter Strategy.

Buy trade result:

As seen in Figure 2, after forming a Trough and entering the market with Buy trades at 2014-07-02 uptrend began. This trend could generate a profit of 11,327 pips in 112 days.

See the Figure 3 for the signal of forming a trough by the "Daily Trading Opportunity" service.

 

Figure 3. DTO Signal for Trend Hunter Strategy.

Buy signal:

As seen in Figure 3, "Daily Trading Opportunity" service at 2014-07-02 indicated forming a Trough with the strength of 32.

By forming a Trough after price hits the Buy zone, we enter the market with buy orders.

 

Entry methods for Sell trades

When price enters or touches the "Sell zone", if one of "Shooting Star" or "Peak" patterns is formed in daily price chart, one can enter the market with Sell orders.

Example: In Figure 4 for EUR/USD currency pair, Sell zone well expressed its role 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 and earned small profits limited to 100 to 200 pips, but as seen in the Figure 5, finally, after forming the shooting star and the peak at the same time, during the last entry, downtrend began and we could earn a very big profit.

Figure 4. Sell entries for Trend Hunter Strategy.

 

Figure 5. Sell entry based on shooting star for Trend Hunter Strategy.

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 at 2014-05-09 downtrend began. This trend could generate a profit of 10,287 pips in 150 days.

See the Figure 6 for the signal of forming a peak and shooting star at the same time by the "Daily Trading Opportunity" service.

 

Figure 6. DTO Signal for Trend Hunter Strategy.

Sell Signal:

As seen in Figure 6, "Daily Trading Opportunity" service at 2014-05-09, indicated forming a Shooting Star with the strength of -66 and a Peak with the strength of -82 simultaneously.

By forming a Peak after price hits the Sell zone, we enter the market with sell orders.

 

Tip 1: Entry on early Monday

If any of 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 is closing on Friday.

Benefits of this tip:

  • Avoid unnecessary "Overnight Swap" 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 the Friday night of that week, no Buy or Sell sign of entering the market is indicated in the chart, and we will enter the market on Monday morning if no incident in these two days could cause important influence on the market. So the sign of Buy or Sell will be introduced in the chart for the week after.

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, try to draw these zones as accurate as possible, the uncertainty in all financial markets, may sometimes result in reversal patterns to form before the price touches or enters these zones. In these situations, if the minimal distance between the price and 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.