In this blog I am stating all the rules with chart so that you all can understand this strategy better.
Two Candle Formation
15 Min TimeFrame.
RSI (3) UpperBand 80. LowerBand 20
FOR LONG SETUP
- We need two Bullish candles for a long entry. The second candle should close above the first bullish candle’s high, & the first bullish candle’s low should be lower than the second bullish candle’s low.
- Second Bullish Candle’s RSI(3) value should be higher than 80. (First bullish candle’s RSI value could be anything. Doesn’t matter.)
- Both Bullish Candle should be above 50 EMA.
- Buy above second candle’s High + 1rs, SL will be First candle’s Low -1 rs.
FOR SHORT SETUP
- We need two Bearish candles for Short entry. The second candle should close Below the first Bearish candle’s Low, & the first Bearish candle’s High should be higher than the second Bearish candle’s high.
- Second Bearish Candle’s RSI(3) value should be less than 20. (First Bearish candle’s RSI value could be anything. Doesn’t matter.)
- Both Bearish Candles should be below 50 EMA .
- Sell below second candle’s Low – 1rs, SL will be First candle’s High +1 rs.
Risk Reward Ratio of this strategy is 1 :2
Backtesting Result for 8th April 2020
First setup arrived on 10.00 AM & stop Loss hot for this setup @ 10.30. Total loss of 9 points.
Second Setup arrived on 11.30 Am. & this setup neighter able to hit Target nor Sl. As broker square off the intraday position 15 minutes before closing of market so this trade exited on 4.45 . Gained mearly 4 points in it.
So on 8th April above mentioned strategy in Crudeoil would have given you a loss of 5 points. If it would have traded with 1 lot then 5 *100 = – Rs 500/- + Brokerage & Taxes extra
Backtesting Result for 9th April 2020
The first setup arrived on 10.45 AM & Target got hit for this setup @ 12.30. The total gain of 42 points.
The Second setup arrived on 2.45 pm & Target got hit for this setup @ 4.30. The total gain of 60 points.
So on 9th April above mentioned strategy in CrudeOil would have given you a total gain of 102 points. If it would have traded with 1 lot then 102 *100 = Rs 10200/- Profit – Brokerage & Taxes extra
Backtesting Result for 13th April 2020
The first & only setup arrived at 9.15 AM & throughout the day target was not able to achieve & got exit 15 min before market closing @ 4.45 PM. But managed to gain 114 points.
If it would have traded with 1 lot then 114 *100 = Rs 11400/- Profit – Brokerage & Taxes extra
You can use this strategy not only for CrudeOil But also for Gold & Silver.
You can download the calculator of the same from Button Given below
I have tried to explain each & every step of this strategy & I hope after reading this detailed step by step blog about it with charts, there won’t be any room for confusion at all.
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