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Unveiling Long-Term Benefits with Moving Target Strategy in Forex Trading

Forex trading presents a challenge that demands sound and effective strategies to achieve consistent long-term profits. One intriguing strategy worth exploring is the Moving Target Strategy. Let's delve into a comprehensive explanation below.

What is the Moving Target Strategy?

The Moving Target Strategy is a trading approach that relies on market price movements to determine entry and exit points. The fundamental concept of this strategy is to recognize that market prices are always in flux, requiring traders to continually update their trading plans to align with these changes. This strategy is particularly suitable for the trend-following trading style.

Implementing the Moving Target Strategy

  1. 1. Determine the Timeframe:
    • Choose daily or at least H4 timeframes, in line with the daily trading style.

  2. 2. Identify the Trend Direction:
    • Use larger timeframes to identify the direction of price trends. If necessary, utilize indicators such as Moving Averages and Bollinger Bands.

  3. 3. Look for Rectangle Patterns:
    • Focus on Rectangle chart patterns, which form after stable price movements. Identify support and resistance levels.

  4. 4. Find Entry Points and Wait for Breakout Signals:
    • Determine entry points with strong support and resistance levels. Wait for clear breakout signals in line with the previous trend.

  5. 5. Set Stop Loss Appropriately:
    • Place Stop Loss around 10 pips above (downtrend) or below (uptrend) the valid breakout bar.

  6. 6. Determine Take Profit Levels:
    • Calculate the lowest (uptrend) or highest (downtrend) levels of the past 10 days each day and set Take Profit levels when prices reach these levels.

Example of Using the Moving Target Strategy

In the EUR/USD chart example, it is evident that the currency pair is in an uptrend. A breakout from the Rectangle Pattern occurred on June 27, 2018, with confirmation of the next opening price above the resistance line. Traders can open positions at that time with predetermined Stop Loss and Take Profit levels.

The Moving Target Strategy combines day trading concepts such as following trends, breakout trading, exit strategies, and the use of Rectangle Patterns. With proper risk management, this strategy can be a profitable choice for traders, even utilized by institutional traders to achieve targets with minimal open positions.


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