If you are a Forex trader who is into sci-fi movies and a fan of the movie Bladerunner then you are in for great news: there is a forex trading strategy that is based on the concept of Bladerunner. The strategy is highly dependent on the past data relative to current market prices. We believe, it is safe to say that most of the strategies start out that way. But a trader using the Bladerunner strategy will compare the market price at the time to the price the graph is telling them it should be and use that data to alter the values of their trades. If the market price is greater than the exponential moving average then it becomes evident that the price is bound to decrease sometime soon. Likewise, if the market price is lower than the EMA then it is probable that the price will increase sooner or later.
If you have the knowledge of what goes on in the forex space then using the Bladerunner strategy to carry out trades will be easy enough for you. In fact, it can be argued that it could be the easiest strategy that you ever make use of.
That is probably one of the reasons why people don’t like it that much but it is a great step to learn Forex trading if you are a beginner.
The strategy relies highly on price action to figure out the trends in the market and then reap the rewards afterwards. But before you dive head first into this technique, let’s take a look at the key concepts first.
Trading indicators created by the Blade Runner technique depend on pure price action. Off-graph signals are not required, but rather can be generated for additional information. Having said that, the majority of the time is spent focusing on the price activity itself, which indicates that graphs, pivot points and resistance levels can be additionally used in order to look for new opportunities. Although, using these graphs and indicators doesn’t affect the Bladerunner strategy, people commonly use the Fibonacci levels alongside.
The key feature that differentiates this strategy from the others is that the trader can use it regardless of the time frame. In addition to that, this strategy can be applied to any currency pair available in the market.
However, what you should keep in mind is that although the method doesn’t depend on time, it is most efficient when the Asian markets open up.
Even though the Bladerunner technique is meant for day trading, you can get on with it as soon as the market opens up. So, if you are planning on harnessing this strategy, it is advisable that you start using it as soon as you can.
Fuad Ahmed is of the view that using the Asian market as opposed to the UK market will be more beneficial as when London opens up, the prices change abruptly which leads to inaccurate predictions.
However, it does need to be said that this is a mere suggestion. The Bladerunner strategy can work to its full potential any time of the day and if you find a time period where you reap the most benefits then you should stick to it.
One tip of Fuad Ahmed that we’d like to share before proceeding is that before you make a Bladerunner trade, make sure that the price is trending in order to keep yourself from incurring any losses. What we are trying to get at is that there is a difference between forex trading and gambling. In forex trading a few precautionary majors keep you from losing your money unlike gambling, so take careful considerations where you can.
The ideal thing to do when the price is higher than the EMA is to wait for it to decrease. What is probable to happen is that the price will decrease and touch the EMA before it shoots right up again. Similarly, if the EMA is higher than the price action then you should wait for the price to increase. It will touch the EMA and decrease again.
The signal candle which is the candle leading up to the EMA should reach it prior to you placing the trade. If it doesn’t approach the similar side as the EMA then you should wait until it does as it isn’t the right time to place the trade yet.
If the new candle succeeding the signal candle departs from the EMA then it means that it is a confirmatory candle.
This is an example of successful retesting.
To be brief, this is easiest possible way to place a Bladerunner trade.
If you want to be extra safe before placing a trade then the best way to do that is to observe the cycle repeat itself a few times. If both the candles: confirmatory candle and signal candle, behave the same way as they did in the first place then you can be sure that it’s a trend and you can place the trade then.
How does this method work if it is that simple?
It’s true that this strategy sounds too good to be true but it actually does work. You use the data from the price actions to predict the future prices which is not as hard as it sounds. Actually, it is just the basic knowledge of forex and if you have it, you can’t really incur a loss that way.
Think about it, how many times have you considered making a trade against the EMA? Unless you have an inside knowledge about the EMA that will benefit you, we are going to guess that not a lot of times. It wouldn’t be the most thought out strategy.
The reason why the Bladerunner strategy works is because it is based on the most basic trading principle which is to be patient and wait for the market to become favorable before you place a trade. It really isn’t rocket science if you think about it.