How to Use the Jaroo Price Action Strategy
In this article, we will be discussing the Jaroo price action strategy.
This strategy has interesting features. It defines the key moments, makes market entries simpler, and determines short-term goals precisely. Classic price action may work fine for you, but you better combine it with this trading technique to get better results.
Following are the terms used in this strategy:
- HCR= Highest close of resistance. The maximum level at which the price can close
- LCS= Lowest close of support. The minimum level at which the price can close.
- DCC= Daily close confirmation.
How to mark the levels on the chart?
Firstly look for swings that are local price highs and lows. They are the start and end of the price waves and can be noticed with the naked eye.
Secondly, mark only the levels that have at least two candlesticks of the same opening and closing.
Lastly, use these opening/closing points to draw the levels of this trading system.
You can also use MT4 built-in indicator called ZigZag indicator. It can help to point out swing lows and swing highs on the chart.
Rules for entry
Wait for the price to break through the levels and closed above or below it. You need to place a pending buy/sell stop order. Do not enter if the price has not closed beyond the marked levels. Still, there could be a slight trouble if market spikes suddenly, triggers your order and returns back above or below the levels. This can incur you losses. Hence, it is prudent to check if there is any high impact news pending in the market. Also, make sure not to trade when there is low liquidity in the market and spreads are high.
Understand profit target and the stop-loss order
Set the stop/loss order beyond the opposite low-high point of the breakout candlestick.
Take the nearest support/resistance levels, the stop-loss orders multiplied by 2-3 or the shadows of the previous candlestick to determine the Take Profit order.
Tips for applying the Jaroo system
Keep the following tips in mind.
– Use the Daily Close price of the candlestick for confirmation.
– If the candlestick closes anywhere above/below the level you entered into the transaction, you must exit right away.
– Once you reach the first profit target, transfer the positions in black.
– Do not let the pending orders remain opened after active market hours because it may happen your order gets triggered because of wide spreads.
Bottom line
This trading technique might suit those who find the classic price action too difficult. Still, traders who use other strategies can benefit from the Jaroo price action. However, it is important that you backtest the strategy or play it on the demo account before executing on your live account. Like any other strategy, you may find fake setup. Hence, it is recommended to manage your risk wisely.
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