iShares Russell 2000 ETFEducation
Pro Trader 80-20 Strategy
The 80 – 20 Trading Strategy
The basic idea behind this pro trading strategy is around a simple chart price formation. Particularly, a candlestick bar with a long body and small wicks. Usually, these types of candlestick patterns signal a market reversal. However, there are some price characteristics that need to confirm the reversal signal.
Here are the pro rules:
The body of the candle must take at least 80% of the total candlestick size.
The wicks of the candle must constitute less than 20% (ideally 10% on each side).
Today candle must open 5-15 ticks below (above) the momentum candle (this is meant as a guideline).
Once the market breaks above the momentum candle low you buy.
Stop-loss can be placed below today’s candle low.
Take quick profits as this is a scalping strategy (don’t expect large profits from this chart pattern).
Note* This strategy works best in the futures market, but if you’re a smart trader you can work out some variation of it to make it work on your favorite market be it stocks, forex, or cryptocurrencies.
The basic idea behind this pro trading strategy is around a simple chart price formation. Particularly, a candlestick bar with a long body and small wicks. Usually, these types of candlestick patterns signal a market reversal. However, there are some price characteristics that need to confirm the reversal signal.
Here are the pro rules:
The body of the candle must take at least 80% of the total candlestick size.
The wicks of the candle must constitute less than 20% (ideally 10% on each side).
Today candle must open 5-15 ticks below (above) the momentum candle (this is meant as a guideline).
Once the market breaks above the momentum candle low you buy.
Stop-loss can be placed below today’s candle low.
Take quick profits as this is a scalping strategy (don’t expect large profits from this chart pattern).
Note* This strategy works best in the futures market, but if you’re a smart trader you can work out some variation of it to make it work on your favorite market be it stocks, forex, or cryptocurrencies.
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