GBP/JPY 1-Hour Forex Swing Trading Strategy

Swing trading shares a lot of similarities with long-term trading, however traders tend to scan the market for medium-term market moves.

These moves are known to last more than a day while running for anything up to a couple of weeks.

The GBP/JPY 1-Hour Forex Swing trading strategy is tailored to search for multi-day chart patterns.

Why?

To enable it attain bigger swings or price moves than you would naturally get from a day trade.

The GBP/JPY hourly strategy uses a combination of technical indicators to guide our buy/sell swing trade decisions.

Let’s get started with the chart setup:

Chart Setup

MetaTrader4 Indicators: RenkoColorBars1.ex4 (Default Settings), Retracement Finder.ex4 (Inputs Parameter Modified; A_period=24.0), RSIFilter.ex4 (Defualt Setting)

Preferred Time Frame(s): 1-Hour (optional 4-Hour)

Recommended Trading Sessions: Any

Currency Pairs: GBP/JPY and any other pair

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Download the GBP/JPY 1-Hour Forex Swing Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a long entry if the following indicators or chart patterns gets put on display:

  1. If the RenkoColorBars1.ex4custom indicator paints the candlesticks silver (see Fig. 1.0), price is said to be taken higher i.e. a trigger to go long on the designated currency pair (GBP/JPY).
  2. If the Retracement Finder.ex4custom indicator forms a yellow vertical bar above the 0.00 signal level, followed by blue histograms (refer to Fig. 1.0), it is indicative of a bullish sentiment, as such a long entry will suffice.
  3. If the RSIFilter.ex4custom MT4 indicator displays orange vertical bars that are positioned above the zero center level as seen on Fig. 1.0, price is said to be bullish, therefore a buy alert will do.

Stop Loss for Buy Entry: Place stop loss 5 pips below medium-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes center stage:

  1. If the RenkoColorBars1.ex4custom indicator paints the candlesticks crimson as illustrated on Fig. 1.0, an exit or take profit is duly recommended.
  2. If the Retracement Finder.ex4Metatrader 4 custom indicator readjust to form a yellow bar that is placed below the zero center line, price is said to be making a probable U-turn, hence an exit or take profit is advised.
  3. If the RSIFilter.ex4custom indicator readjust to form sky blue vertical bars below the zero center level, the general trend is said to have shifted in favor of the bears, hence it is a trigger to exit or take profit at once.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If the RenkoColorBars1.ex4custom indicator colors the candlesticks crimson as depicted on Fig. 1.1, price is said to be taking increased downward pressures, therefore a trigger to go short on the GBP/JPY pair.
  2. If the Retracement Finder.ex4custom indicator form a yellow vertical bar below the 0.00 signal level, followed by red histograms as exemplified on Fig. 1.1, it is indicative of bearish market sentiment, as such a sell will do.
  3. If the RSIFilter.ex4custom MT4 indicator displays sky blue vertical bars that are positioned below the zero center level as shown on Fig. 1.1, the overall sentiment is said to be bearish, therefore a sell alert will suffice.

Stop Loss for Sell Entry: Place stop loss 5 pips above medium-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the RenkoColorBars1.ex4custom indicator paints the candlestick silver during a bearish trend as demonstrated on Fig. 1.1, it is a signal to exit or take profit immediately.
  2. If the Retracement Finder.ex4Metatrader 4 custom indicator readjust to form a yellow bar that hangs above the 0.00 signal line, price is said to be making a possible U-turn, hence an indication to exit or take profit at once.
  3. If the RSIFilter.ex4custom indicator readjust to form orange vertical bars that sits above the zero center level, the overall trend is said to be shifting in favor of the bulls, therefore an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

Free Download

Download the GBP/JPY 1-Hour Forex Swing Trading Strategy

About The Trading Indicators

The RenkoColorBars1.ex4 custom indicator is built on the Renko chart which is in turn based on time or volume, as well as price change.

The RenkoColorBars1.ex4 indicator is shown to disregard time and volume while considering only price changes.

The Retracement Finder.ex4 custom indicator is a technical tool that scans the market for some sort of retracement in the general price trend.

RSIFilter.ex4 is an oscillator that is built on the RSI indicator, offering traders clues on the overall market trend based on prevalent overbought or oversold conditions.

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