hey everyone Stephen here with the
trader channel and today i'll be sharing with you one of my favorite trend
continuation trading strategies the reason this strategy is one of my
favorites because it is very simple yet very effective when the market is in
trend in order to utilize this strategy properly you will need to know how to
reach structure and how to determine trend if that's something you're having
trouble with then go ahead and subscribe to this channel because i will be doing
a video shortly on how to read structure and how to determine trends in the
market so hit that like button and hit that subscribe button while the intro
and disclaimer a roll and I'll be right back ok so I'm going to briefly go over the
closed above break above and close below break below principles just to give you
an idea of what i'm talking about as i said before i will be doing a video
further explaining how to do this but here in this situation that we see
forgive my terrible drawing of these candles but we see that the market came
up retraced down to the swing low and then we broke above the most previous
structure level here and since we broke above and closed above this most
previous resistance level our expectation would be a continuation of
bullish momentum a continuation to the upside before a break below the most
previous swing low right here so what we expect this market to do is
to go up further before it comes down and breaks below this most previous
swing low the way we take advantage of this using this trading strategy is
after we get a break above close above the most previous resistance level right
here as we get a break above close above this level we take a fibonacci
retracement for more swing low right here up to the highest swing happy for
the market starts to retrace and all we do is wait for a 786 retracement as i
said before very very simple yet very very effective strategy the reason we wait for the 786
retracement is because we expect the market to continue bullish before
breaking below this swing low so what that means is if we wait for a 786
retracement we can put our targets backup at previous structure because we
expect the continuation of the bullish trend and we can put stops down here
below the most previous swing low just in case we're wrong because if we are we
want to get out for minimum losses if we're wrong and we have an
opportunity for a very nice gain and I hope that makes sense if it doesn't then
leave me a comment and ask any questions you might have and i'll try to answer
the best i can in the comments section below this video I'm going to now go to
the charts and show you a few examples on the dollar yen that we took advantage
of over the past couple of weeks and then i will show you a live example of
this trading strategy on the euro is a 15-minute chart alright so here we are on the dollar yen
and i'm just going to start right here in a random position on the chart and
show you a few examples of the trend continuation 786 strategy so what we
look for first is a break above close above or break the low close below of us
previous structure level here is our previous resistance level we obviously
break above and close above it right here since we broke above and closed
above that level what i would do is if this market had not already played out
if this was all to the left and I had no right into my chart what i would do in
this situation let's take a fibonacci retracement from
swing low to swing high and wait for the 786 retracement right here and as we can
see the market rally before ever getting close to the 786 which is fine that will
happen a lot and next off let's continue on the chart as you can see we get
another break above close above this previously resistance level right here
on this candle we break above close above this level so what I would do is
take a fibonacci retracement from this swing low the most previous window here
up to the swing huh before we start to really trace and as you can see we came
down here to the 786 would have been filled on this order and we would have
hit targets they're coming up to this previous resistance level which is
where our targets would have been and are stops would have been below our most
previous wing load this would have came down and put us through a little bit of
paint on this week right here but we would not have got stopped out on that
trade and we just continue down the charts doing the same thing right here
break above close above this level so now we're looking at this most previous
swing low right here so we come from this swing low up to the swing have
before it starts to retrace we would have bought the 786 right here on this
candle week and we would have been stopped out of this trade but look here
look what happens now now we have instead of breaking again to
the upside now we have broke through this support level this support level in
this support level what that tells me is bearish rotation now that we broke down
below the support levels i'm in a bearish trend mindset with that being
the case i'm going to now take a fibonacci retracement from this swing
huh down to the swing low and look for my same 786 retracement as you can see
would have been filled here and this is a trade we actually took advantage of we
were filled their and the market eventually rolled over and did hit
targets so I hope that helps you to better understand the 786 strategy as i
said before leave me a comment if there's something you don't get about
the strategy and i'll try my best to answer it in the comments section below
this video I'll now be showing you a live example on the euro aussie 15
minutes or ok so here we are on the euro z awaiting the completion of the 786
strategy that I was talking about and pretty much all we're doing here is
waiting for below close below the previous structure
and then putting a limit order at the 786 fibonacci retracement a stoploss
above your previous swing high and profit targets at the lowest body of the
previous swing low and there we go we're field and i will keep you updated on how
this trade plays out as you can see guys we've come up into our 786 retracement
here and immediately turned around we've now made it about halfway to
target so we'll see how this plays out and i'll be back to update you all right
here we go so we've gotten within about five pips
of our targets here and when we get down here within three pips i'm going to move
stop losses to break even so that we can be in a risk free trade
and hopefully we'll see this market continued down as you can see we've made
a lower high here and then we put in a very long bearish candle so far and this
candle has 15 seconds before it closes we can get under these lows right here
with this candle then our stop losses can be moved down to break even so now we've got within three pips of
our prophet hear what I'm going to do is take my stop-loss bring it down here to
break even and take all the risk off the table on the straight so this is now a
risk free trade here we are within one pip of hitting
targets just waiting for it to press a little bit lower so we can get out of
here with some money in the bank and there we go guys target's field alright everyone so that's going to do
it for today's video I hope you enjoyed this video i hope you liked it and if
you did go ahead and hit that like button go ahead and hit the subscribe button so
that you're notified anytime i create a new tutorial and i do want to remind you
guys that this strategy does work for me but it may not fit your trading style this is something that you definitely
want to back test yourself on your specific pairs that you trade and
support specific time frames that you trade because depending on those two
factors the results of this strategy will vary dramatically so it's very
important that you do your own due diligence and back test these trading
strategies for yourself to see if it fits in your trading plan and with that
said I hope you enjoyed this video keep an eye out for my next one best of
luck on all future traits and i'll see you next time yeah yeah