EURAUD 15M UNIDIRECTIONAL TRADING STRATEGY

Unidirectional Trade Strategy
STEP 1 - The first step to start trading is to choose the right market to trade and the best time of the day to trade.

You chose a market and you stick with it until you master it.

For the purpose of his unidirectional trade strategy review, we’re going to stick with trading FOREX.

Moving forward, we’re going to lay down some rules to trade only in one direction.

STEP 2 - Only Buy if We Trade Above the Opening Price
We’re not going to predict which way to trade, but instead, we’re going to go along with the intraday momentum strategy.

What we mean by this is simple:

If the market price trades above the opening price of the new trading day, it’s an indication that the buyers are in control, so we want to go along with the flow of the market. The other alternative is to try to guess the market, which is a lot harder.

Note* conversely, if the price is below the opening price we only trade on the short side.

Since we’re trading within the forex market, we want to focus only on the major trading session like the forex London market and the New York sessions.

Step 3 - Buy at the First Green Candle that closes above the Opening price of the New Trading Day.
We need to clarify some rules:

If during the first hours of trading the market has spent most of its time above the opening price our bias for that day is up, and we only look to buy. Conversely, if during the first hours of trading the market has spent most of its time below the opening price our bias for that day is bearish and we only look to sell.

When the next major trading session opens (i.e. The London session) we look for the first bullish candle that closes above the opening price to trigger our entry:

You can actually buy each time you see the price retesting and getting rejected from the opening price.

We’re going to use the same rules and buy at the first bullish candle that closes above the daily opening price.

Now, you may be asking yourself:

“What if the market is already above the opening price?”

“How do we enter?”

Buy after each two consecutive bullish candles. Or, if you have a big bullish candle with its trading range bigger than the surrounding candles, you can go ahead and buy.

Step 4 - You determine your own Take Profit levels or
Take Profit Equals 2 times ATR
We are going to use the average true range (ATR) indicator which measures the price volatility. This will give us a more efficient way to pinpoint the dynamic exit price level.

As our profit target, we’re going to use the 14-period ATR applied to the 15-minute chart and multiply that by 2.

For example, if the ATR is 5 pips our take profit will be 2 x ATR, which is 10 pips.

Here are some of the advantages that come with trading only in one direction:

Trading along with the momentum.
A big profit potential on strong trading days.
Reduces risk and improves the risk-reward ratio.

Final Words – Unidirectional Trading Strategy
In summary, a unidirectional trading strategy is an easy-to-use approach that is a great way for novice traders to get their feet wet. Short-term traders are better off with our unidirectional intraday trading strategy because they can profit without predicting the market.

The bottom line is that if you stay nimble and react to the current market price, you’re better than trying to forecast the market. When you’re tied to your predictions you’re blinded to what’s really going on in the market.

Keep it simple and trade in one direction!

Thank you for reading!