ForexEzy
No Result
View All Result
  • Home
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
  • Home
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
No Result
View All Result
ForexEzy
No Result
View All Result
Home Forex Tools Forex Indicators

How to Trade GBP/USD Using Price Channel Indicator?

by Richard Brase
September 23, 2020
in Forex Indicators
0
How to Trade GBP/USD Using Price Channel Indicator?
0
SHARES
11
VIEWS
Share on FacebookShare on Twitter

You can use several methods to find and trade trends in the GBP/USD currency pair, but one system uses consistently good results. Generally, it is recommended to not use systems that only work with one pair. However, the results of this method are too good to ignore. Moreover, the GBP/USD pair has its own personality, and it usually has larger than normal moves within a session, and within the overall trend. 

Table of Contents

  • What is a Price Channel Indicator?
  • The Setup
  • Trading the Price Channel Indicator
  • The Exit
  • Trading GBP/USD Trend System: Long
  • Conclusion

What is a Price Channel Indicator?

The famous Turtle traders used to determine breakouts of the last fifty-five and twenty days by using the price channel indicator. We can use the same theory in a shorter timeframe. The high and low of the previous five sessions can be used. The price channel can decide on the setup and entry. Look at the example below to see a five-period price channel indicator. 

Price Channel Indicator

The Setup

Long Price Channel Setup

The setup for a long price channel trade takes place when the price goes up to the highest high for the last five sessions. Ignoring the most current session is the easiest way of calculating the highest high of the last five sessions. Then, you may draw a horizontal trend line from the highest high that starts with the fifth session and moves forward to the present session. 

Short Price Channel Setup

The setup for a short price channel takes place when the price goes down to the lowest low of the last five sessions. To calculate the lowest low of these five sessions, you can draw a horizontal trend line from the lowest low that starts with the fifth session and moves forward to the present session.

Trading the Price Channel Indicator

The Entry

Long Price Channel Entry – The entry takes place when the price goes one pip higher than the highest high of the last five sessions. 

Short Price Channel Entry – The entry takes place when the price goes one pip lower than the lowest low of the last five sessions.

The Stop Loss

Look below to see an example of a long price channel stop loss that is placed 30 pips below the entry –

a long price channel stop loss that is placed 30 pips below the entry

Below, you can see an example of a short price channel stop loss placed 30 pips above the entry –

a short price channel stop loss placed 30 pips above the entry

The Exit

The exit we can use is a three-period high/low channel cross. You can visualize this the best way by plotting two simple moving averages (SMA). You may plot the SMA of the high of the previous three periods for a long trade. On the contrary, for a short trade, you can plot the SMA of the low of the previous three periods. 

Long Exit – The long price channel exit for the five-session price channel takes place when the high is lower than the SMA of the high of the previous three sessions.

Short Exit – The short price channel exit for the five-session price channel takes place when the low is higher than the SMA of the low of the previous three sessions. 

Rules for GBP/USD Trend System Trading

Long Trades

Long Setup – You can look for price to go up to the upper band of the five-period price channel indicator.

Long Entry – You may buy one pip above the upper band of the five-period price channel. 

Long Stop Loss – A hard stop can be placed below the entry: 30 pips. 

Long Exit – You can sell at the close of the bar when the high falls below the three-period SMA of the high. 

Short Trades

Short Setup – You may look for price to go down to the lower band of the five-period price channel indicator.

Short Entry – You can sell short one pip below the lower band of the five-period price channel.

Short Stop Loss – A hard stop can be placed below the entry: 30 pips. 

Short Exit – You may buy to cover at the close of the bar when the low is above the three-period SMA of the low. 

Trading GBP/USD Trend System: Long

Long Setup – You can look for the price to go up to the five-period upper band price channel for a long setup. Look at the chart below where the upper band is blue.

Long Setup

Long Entry – Once you establish that the setup has happened, you can buy one pip above the five-period upper band price channel.

Long Entry

Long Stop Loss – A hard stop can be placed below the entry: 30 pips. In the chart below, the black line indicates the placement of the 30-pip stop loss. 

Long Stop Loss

Long Exit – You may sell at the open or close of the next bar if the high is lower than the three-period SMA of the high. In the chart below, you can see the trade closing at the next bars open, after meeting the criteria to exit. The three-period SMA is in red on the chart below. 

Long Exit

Trading GBP/USD Trend System: Short

Short Setup – You can look for the price to go down to the five-period lower band price channel for a short setup. The lower band is displayed in blue on the chart below. 

Short Setup

Short Entry – Once you establish that the setup has taken place, you may sell one pip below the five-period lower band price channel.

Short Entry

Short Stop Loss – A hard stop can be placed above the entry: 30 pips. The black line on the chart below indicates the placement of 30-pip stop loss. 

Short Stop Loss

Short Exit – You may buy to cover at the open or close of next bar if the low is higher than the three-period SMA of the low. In the chart below, you can see the trade closing at the next bars open after meeting the criteria for exiting. The three-period SMA is in red on the chart below. 

Short Exit

Conclusion

The GBP/USD trend trading system uses the larger moves that take place in the GBP/USD, both within long-term sessions and individual sessions to help you profit. Furthermore, it uses a time-tested breakout entry system, the price channel breakout.

ShareTweet
Previous Post

Swing Trading Strategies For Beginners

Next Post

How to Trade Timeframes in Forex?

Related Posts

Point Zero Trading

Point Zero Trading Review

by Tim Baudin
March 26, 2021
0

Point Zero Trading is a website where you can find several Forex indicators and expert advisors for the Metatrader 4...

Lux Algo

Lux Algo Review

by Chintan Patel
March 1, 2021
0

Lux Algo is a provider of advanced Forex tools that you can use in tandem with the TradingView website. It...

FX Delta

FX Delta Review

by Adam Stanley
February 22, 2021
0

FX Delta is an indicator that provides “The Innovative Way To Extract Money From Market Trends.” It’s “The Most Accurate...

Agimat Trading System

Agimat Trading System Review

by Adam Stanley
January 22, 2021
0

Today’s review will be about an Agimat Trading System company. The service is introduced as “The Best Forex Scalper Trader...

Exynox Scalper

Exynox Scalper Review

by Chintan Patel
January 9, 2021
0

We’d like you to read a review of Exynox Scalper. It was introduced as a super-intelligent Forex tool that is...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Best Forex EA

  • ROFX 9/10
  • Forex Fury 8/10
  • FXgoodway 7.5/10
  • Z Trader FX EA 7/10
  • Forex Incontrol Reborn 6.5/10

Popular News

  • The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    2 shares
    Share 2 Tweet 0
  • Rofx Review – High Profitability and Stable Performance Analysis

    29 shares
    Share 29 Tweet 0
  • The Best Forex Scalping Strategy – Using 3 Popular Technical Indicators

    0 shares
    Share 0 Tweet 0
  • The Best MT4 Indicators & Expert Advisors For Forex Trading

    2 shares
    Share 2 Tweet 0
  • How to check if the indicator is repainting?

    2 shares
    Share 2 Tweet 0

Trading

Footer

We are dedicated to demystify the world of forex trading for you – no matter what level you are on.

Categories
  • Automated Trading
  • Day Trading
  • Forex Basics
  • Forex Brokers
  • Forex Education
  • Forex Forecasts
  • Forex Indicators
  • Forex Market Commentary
  • Forex Robots
  • Forex Signals
  • Forex Tools
  • Forex Trading Strategies
  • Fundamental Analysis
  • Money Management
  • News
  • Risk Management
  • Social Trading
  • Technical Analysis
  • Top World Traders
  • Trading Psychology
  • Uncategorized
Tags
arbitrage atr bollinger bands cci chart patterns classics copy trading courses day trading forex brokers forex charts forex ea forex education forex forecasting Forex Indicators forex software reviews grid trading hedging ichimoku macd market cycles news trading oscillators price action trading rsi social trading strategies tips & tricks trading bots trading platforms trend trading Video
  • Terms of Use
  • Privacy Policy
  • Compensation Disclosure
  • Risk Disclosure
  • About Us
  • Contact Us

Copyright © 2021 by ForexEzy.com

No Result
View All Result
  • Home
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog

© 2021, Forexezy.