Third Strike Forex Swing Trading Strategy
Third strike pattern is a price action trading method. The market may be trending upward or downward and notice that a low will be made, then another one will form that is lower than the first and the 3rd low will form that is lower than the 2nd. This method is a profitable one and it can give you good profits.
Important Points:
- You must know how to draw trendlines.
- The trendline must be drawn downwards connecting the first 2.
- The third point or the 3rd strike is when the price comes back down and touches the trendline that was drawn.
- This strategy is for long only or buying only.
- The space between 1, 2 & 3 should be even, or almost close to even and must not be too close to each other. Which means the spacing must not be too close that makes it insignificant or too far apart that nobody notices. This is one of the most important points in determining the best 3rd strike forex pattern.
TRADING RULES:
- Draw the downward trendline connecting the two 1st lows.
- The price must come and touch it on the 3rd.
- Enter long or buy immediately at the market price as soon hits the 3rd point and touches the trendline.
- Place stop loss when the candlestick that touches the trendline after it closes. Place it at 5-15 pips below the low of that candlestick.
- Take profit on the previous highs or trail stop by moving stop loss under the subsequent higher lows that forms as the price continue to move up.
Use this method in all major pairs. This is also applicable to any timeframes.
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