FX Strategy: D1 Engulfing Reversal Pattern Trading
- May 20, 2024
- 1 min read
Updated: Aug 6, 2024
In this strategy article, we are going to have a look at a Forex Reversal Trading Strategy. We have backtested this strategy between 2014 and 2024 on various major Forex symbols.
In this article, you will learn how this strategy works and how you can trade it.
Video Explanation
Strategy Rules
Timeframe = D1 (Daily)
Symbols = EURUSD, GBPUSD, EURGBP, USDJPY, EURJPY, GBPJPY
Entry Conditions BUY:
Price has to close below 20-day low
If a bullish engulfing candlestick pattern forms, BUY
Set SL and TP to 2 * ATR (period 20) away from entry price
Entry Conditions SELL:
Price has to close above 20-day high
If a bullish engulfing candlestick pattern forms, SELL
Set SL and TP to 2 * ATR (period 20) away from entry price
Note: The above-mentioned strategy also uses a volatility filter to optimize trading results.
Below are the cumulative backtest results for each currency pair trading 1 lot volume (static exchange rates used):
Interactive Backtest Data
You can view backtest data and interactive charts by clicking the button below:
