Build A Waves Surfing Strategy ( Auto Trading ) - Chapter 6

Build A Waves Surfing Strategy ( Auto Trading ) - Chapter 6

6 June 2016, 21:59
Juan Fernandez

1. Introduction

In this chapter we will analyze trend area for check if Trend and SnR combination works fine in this kind of moments.


2. The path

In first capture we can see a common bullish trend with 2 pullback on the way. First pullback is enough long and strong ( around 100 pips ) for Trend tool show SELL signal. We can see Trend signal for open trade is blocked for SnR. 

Even this time that entry is good, its an consolidation area doing a restest of last bear movement.Fortunely SnR show a couple candles later a strong breakout of last resistance followed for small restest of broken area and finalizing with a long 5 candles confirmation of that broken area.

Finally we only delay one candle the entry ( with little difference between prices ) but we get more solid signal.

We delayed the entry a bit for get more safer entry


Next capture show first pullback. We have clear swing as resistance. SnR show some break zones ( blue boxes ). When swing resistance is formed we see at histogram signal pass to BUY ( breakout ) to neutral ( outside SELL zone ). This dont affect our opened trade because we need both tools show SELL signal.

Later support area is formed. This support area will have important role because formed first S/R in this consolidation area.

When Trend slope change to SELL, we have a critical area where SnR can be aligned to Trend signal. That area is support area breakout.

We have around 90 pips S/R area in a consolidation moment. This area will decide if we have trend continuation or swing 

As we can see in this zoomed capture, areas are very well defined inside SnR. Price never enter in Breakout area ( where will have SELL signal ). Only candle touch it had a new support zone created before ( small red box after 4 blue histogram bars ) downing the 127% enough for dont be touched.

We save the critical situation by little. SnR NEUTRAL zone filtered well the price movements 


3. Successful exit 

Last capture show the exit. Its evident the most important part of trading and where normally EAs fails. When trend changes signal to SELL SnR we start to print support areas and broke it very fast. 

Like when we had the entry, SnR breakout SELL signals and areas with NEUTRAL signals dont invalidate our BUY trade. Because we need a confirmed SELL ( both tools ) for have an valid opposite signal and can close current trade. 

When swings happens and its broken the consolidation, normally you have an strong movement with a restest of broken area. Safe S/R rules tell you have wait restest of broken zone for confirm that breakout is real. If we check are where we have both tools sending SELL signal, its near that retest area. And exit timing is close to finish that retest. Then we confirmed all trading parts are working as expected.

Even for aggressive trading we didnt catch swing movement ( 130 pips ), for cautious traders 110 pips profit is very good day

4. Final words

For have simple strategy, seem we have covered all areas needed for have a profitable auto system. Anyway, when you have a good base you always want improve it.

5. Links

If you liked some tools you can take it here

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