If your broker or exchange allows buy stop and sell stop pending orders, offers leverage of at least 1:30, and doesn’t charge exorbitant fees for holding a position overnight. If it’s psychologically hard for you to close a loss, but you don’t want to use dangerous martingale strategies with averaging. Then “Sharp Turn” is probably a good solution for calm, methodical trading.
The strategy works for trading crypto and major Forex pairs on 1-hour charts (H1). It requires little attention, so it’s accessible for people with a full-time job and little free time for trading. Its main parameters:
- Timeframe: H1 (1-hour charts).
- Instruments: EURUSD, GBPUSD, ETHUSDT, SOLUSDT and other liquid pairs.
- Leverage: 1:30 or higher.
- Risk management: 0.01 lot per 100 dollars of capital (or 1% on crypto exchanges).
- Algorithm: market orders and buy stop and sell stop pending orders.
How do you trade this strategy?
It’s called “Sharp Turn” because it uses reversal orders. That is, in each trade, instead of a stop loss order, you place a pending order in the opposite direction with double the lot. Here is how it works:
The key to this type of strategy is finding the entry point before the trend move begins. And it doesn’t matter which way that trend goes: if the market moves against us, we flip the position and exit at zero on both trades.
That is why the most important aspect of the system is the entry point. The trader must find the moment when the market won’t stall or form a sideways channel around the entry price.
Sharp Turn entry point
To enter, I use my own pattern, “Little Brother”. It is made up of two bullish or two bearish candles: the first covers a large price range and the second, so to speak, consolidates what was achieved.
The pattern has a precise definition:
- the body of the first candle is larger than the bodies of the previous 5 candles;
- the second candle must close above the high of the first (or below its low in the bearish version);
- the body of the second candle must not exceed 30% of the body of the first;
- both candles must be of the same type: only bullish or only bearish.
Entering and managing the trade
Now that you know the reversal management method and the definition of the “Little Brother”, all that’s left is to put it all together. Open the 1-hour chart of the chosen instrument and wait for the pattern to form. Pay attention to its size: a range that is too large increases not only the take profit, but also the time needed to bring the position to breakeven if the market goes against you.
The size of the pattern must be within 40% of the daily ATR.
The take profit of the initial trade is placed in one of two ways:
- equal to the range of the “Little Brother” pattern;
- or equal to the range multiplied by 2, but in that case with a mandatory move to breakeven when the price travels the range.
If the pending order is triggered, the previous take profit is removed. And all trades of the reversal method are closed when they reach breakeven. You can follow the formula 1+2+2+2… There is also a martingale variant (1+2+4+8…), but it makes risk grow very quickly: I don’t recommend it for getting started.
