All About the Bladerunner Trading Strategy
Posted by FXandBinaries , 11 December 2016 · 869 views
The Bladerunner trading strategy is based around finding optimal trade entries using nothing but pure price action. Candlesticks, pivots, rounded price numbers and classic support and resistance levels can also be used in this trading strategy.
Although this strategy doesn't need indicators, the RSI, MACD, stochastics or moving averages can all be used to refine possible entry points. But, one of the most effective ways to make money trading off this strategy is by utilizing the 20-day Exponential Moving Average (EMA).
How Does the Bladerunner Strategy Work?
The Bladerunner strategy can be used on any currency pair and any time frame, although most traders using this technique are scalpers who primarily use the 5 minute time frame.
It is called the Bladerunner strategy due to the fact that the 20-EMA, or any other similar technical indicator, act as a reference point for price, which gives charts the appearance that a knife is dividing price from the EMA's line.
This strategy is best used on trending price action, no matter the time frame.
When price rises above the 20-EMA, our bias is bullish. With this, we expect price to eventually move down, hit the 20-EMA, and then bounce upwards to continue its bullish momentum. The same is true of price when it is below the 20-EMA. Expect price to eventually move up, touch the 20-EMA and continue downwards.
But, if price does not obey these rules and several candlesticks close convincingly above or below the EMA in the opposite direction, we can safely assume price will soon move in that new direction, but only after it has successfully retested the 20-EMA.
Remember the rules for a Bladerunner trade entry:
1) Price must breakout of its range and cannot be consolidating, price must be trending.
2) Price must successfully retest the 20-EMA.
There are a few other helpful tips and words of advice to apply onto the Bladerunner strategy.
- Use candlestick formations to identify when price will move up or down to hit the 20-EMA.
- Aggressive scalpers and binary option traders should take advantage of the two guaranteed movements this strategy provides. For example, place a short-term trade when price moves to retest the 20-EMA, and then place another trade when price has successfully rebounded towards the original trending direction to double your profits.
- When a candlestick rebounds to the 20-EMA, it should close in the original direction from which it had approached it from. Look for this to avoid fakeouts.
- ac44, pamc and mt4coder like this