(+) Day-Trade Strategies

FALSEBREAK CANDLE TRADING STRATEGY

Trading strategy using support and resistance levels, with a false break candle as the trigger.

 TRADING STRATEGY

■ Style: Day-Trading Strategy

■ Name: Falsebreak Candle Trading Strategy

FINANCIAL ASSETS

■ Forex Majors

 TIMEFRAME

■ M5 timeframe (5-minutes)

■ 5-7 daily trades

 INDICATORS & SETUP

This simple strategy uses no indicators; instead, it relies on nearby support and resistance levels along with a false break candle.

■ Support and resistance define the basic demand and supply price range.

■ A false break candle serves as the trigger for entering the trade.

Explaining Support and Resistance (S&R)

Support is a price level where buying pressure tends to prevent further decline, effectively acting as a floor. Resistance is a level where selling pressure typically stops price advances, acting as a ceiling. When price breaks through either level, it often signals a potential trend continuation or reversal.

 TRADING SIGNALS

This is how you can implement the Falsebreak Candle Strategy:

First, define the range by identifying key support and resistance levels.

■ (↑) Long Trades

1. Wait for the asset's price to reach a significant support level.

2. Look for a candle with a shadow below the support level and a close above it—this is a falsebreak candle.

3. Once the falsebreak candle is confirmed, open a long trade.

■ (↓) Short Trades

1. Wait for the asset's price to reach a significant resistance level.

2. Look for a candle with a shadow above the resistance level and a close below it—this is also a falsebreak candle.

3. Once the falsebreak candle is confirmed, open a short trade.

 TRADING ORDERS

■ Take Profit: 200–250 pips

The take-profit level depends on the size of the range between support and resistance. For a long trade, place the take-profit 5–10 pips below the resistance level. For a short trade, place it 5–10 pips above the support level.

■ Stop-Loss: 80 pips

Set the stop-loss just below the falsebreak in a long trade, or just above the falsebreak in a short trade.

■ Profit/Loss Ratio: 2.5

CHART: Falsebreak Candle Strategy

■ Falsebreak Candle Day-Trading Strategy

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