Railroad Tracks Forex Swing Trading Strategy

November 13, 2016

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Railroad Tracks Forex Swing Trading Strategy

This is a swing trading strategy that is comprehensive and easy to execute.

Look for a candlestick that has almost the same lengths. They look like parallel railway tracks.

If the first candlestick is bearish (red) then the 2nd candlestick must be green or vice versa.
A bullish Railroad Track Pattern has a red candlestick in front and a green candlestick after it.
A bearish Railroad Track Pattern has a green candlestick in front and a red candlestick after it.

If you are in a downtrend, you will see the forming of a long bearish candle and immediately a long bullish candle will be formed. This happened because traders who enter short forming the long bearish candle realized that they are on the wrong side of the market and they immediately exit their trades and then get into the opposite side of the market causing the formation of the long bullish candle.

If you are in an uptrend, the situation will be opposite to what you is happening above.

Trading Rules:

Available only during a trending market. Avoid trading on a range or sideway market. Use this strategy on a 1-hour or higher timeframe.

Buy Entry:

Wait for the bullish railroad track candlestick to form, then place a buy stop 2-5 pips above the high of the pattern.
Place your stop loss anywhere from 2-5 pips below the low of the pattern.
Take profit at 1:3 risk and reward ratio, this is 3 times what you risk. You can also trail the stops.

Sell Entry:

Wait for a bearish railroad track candlestick form, then place a sell stop order 2-5 pips below the low of the candlestick.
Place your stop loss at leat 2-5 pips above the high of the pattern.
Take profit at 1:3 risk and reward ratio, this is 3 times what you risk. You can also trail the stops.

Open a EURUSD daily chart.