Money Cow" trading strategy

Money Cow" trading strategy works with the currency pair GBP/USD and is based on only one rule: if the price moves during the trading day in one direction more than 140 pips, then this trend in the market tends to remain for the next trading day (or two days). So 140 pips a day in one direction is the main rule of this strategy.

Marketplace: Forex;
Currency pair: GBPUSD;
Trading Indicators: a price pattern;
Trading strategy: intraday;
Timeframe: Daily;
Protective ordersTakeProfit, StopLoss, TrallingStop.

Trading signals on the "Cash Cow" strategy

If the currency pair passed less than 140 pips during the day - this movement is a standard intraday price fluctuation, it does not carry the necessary signs of the development of a strong trend movement on the market.

Not every day. GBP/USD currency pair moves more than 140 points in one direction. Such movements occur about 6-7 times a month. And these movements confirm one of the well-known trading rules: "the rarer one or another occurs in the market price patternThe more likely it is that it will be profitable.

After we have detected a "price explosion" in the market, we wait for the next trading day, we wait for the moment when price will go over 70 pips in the direction of yesterday's riseand as soon as this condition is met, we open a trading position.

After entering the market, it is necessary to place a safety StopLoss at a distance of 60 pips from the point of entry into the market. The position is closed by TakeProfit at 100 pips or at 11:30 (GMT) on the next trading day. You can also use Trailing Stop at a distance of 40-50 pips.

An example of the "Cash Cow" trading strategy

On the daily time interval, we are looking for a day in which there was a movement of more than 140 pips. Figure 2 shows a more detailed - on the 5-minute time interval the same movement in the market.

We check compliance with the second condition: on the next trading day, the market should pass more than 70 pips in the same direction as 140 pips the day before. And in Figure 3 we can observe the market situation on the next trading day.

The set conditions are met and we open a short position and immediately place an insurance StopLoss at 1.7502 (60 pips from the entry point), TakeProfit is located at the level of 1.7432 (100 pips from the entrance to the market).

You can make sure that the price has reached the level of TakeProfit on the same trading day.

Important: When Forex trading it is necessary to adhere to a very important trading rule: it is not necessary to risk more than 2-4% from the size of the deposit. The maximum 5% if you are confident in the trading position and it is confirmed by a lot of trading signals.