What is Bladerunner Trade Strategy?
Bladerunner Trade Strategy is a forex trading strategy that involves the use of Exponential Moving Average of 20 periods (EMA 20).
This EMA acts as a blade to cut through the price as it moves in order to settle on either an upward or downward bias.
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This then earns the strategy the name Bladerunner, for cutting through the price (blade) as it moves along (runner).
This is because a complete signal is generated only after successful re-testing of the Exponential Moving Average (EMA 20).
Come to think of it, the Bladerunner trade strategy is actually one of the best forex trading strategies for beginners as it is applicable on any time frame and any asset which a trader chooses to trade.
The Principle behind the Bladerunner Trade Strategy.
You must be curious to know how this strategy works and all that. Let us do exactly that in this part.
The first consideration for the application of the Bladerunner trade strategy is that the price must have broken out of a certain range or if not so, it must be trending.
So if you identify a trending market price, then such qualifies for the application of this forex trading strategy.
After identifying a trend, you need to observe how the price behaves with respect to the 20-period EMA:-
- If the price is trending above EMA 20, then you can partly resolve to an upward bias. The reason we say partly is that there is something more that must happen first so that we can resolve completely to an upward bias. This is when the price drops to hit EMA 20 and bounces back upwards, thus re-testing the EMA successfully.
- You need to realize that there is a possibility that the price will drop, hit the EMA and break it, closing below it. In that case, your upward bias has been breached and you have no choice but to observe for a downward bias when that happens.
- If the price is trending below EMA 20, then you may partly resolve to a downward bias. You will only confirm that you truly can call it a downward bias after the price has risen to hit EMA 20 and bounce back downwards, thus re-testing the EMA successfully.
- You already know that the price is not limited and can rise to hit that EMA 20 and break it by closing above it. When that happens, you can no longer hold onto a downward bias – lookout for an upward price move.
Trading the Bladerunner Trade Strategy in Olymp Trade.
Let us now gain expertise on how to trade this simple forex trading strategy. A strategy must earn you profits or it will be useless to learn.
Trade the Bladerunner Trade Strategy in the following simple steps:-
- Apply EMA 20 on the Price Chart.
- Identify a Trend or Breakout.
- Observe Price Behavior in respect to EMA 20.
- Allow Successful EMA 20 Re-testing.
- Enter Buy or Sell Position.
- Adjust your Stop Loss.
- Adjust your Take Profit.
1. Add EMA 20 to your Olymp Trade Chart.
This forex trading strategy is based on an Exponential Moving Average of 20 periods. Apply EMA on your chart, adjusting it to 20 periods.
2. Trend or Breakout.
The market price must have broken from a certain range and trend either upwards or downwards.
If there is no apparent range, then ensure the price is trending towards a certain direction – uptrend or downtrend.
3. Price Behaviour with respect to EMA 20.
If your breakout was upward or you spotted an uptrend, then lookout for a price trending above EMA 20. It is the only possible way you can strategize and profit from the uptrend using this forex trading strategy.
If your breakout was downward or had identified a downtrend, then watch if you will see the price trending below EMA 20.
If it doesn’t, then you may not have a fruitful trading opportunity there, as far as this forex trading strategy is concerned.
4. EMA 20 Re-testing.
Having the price trending above EMA 20 in an uptrend or below EMA 20 in a downtrend is not reason enough to trade. The EMA must be re-tested successfully as the moving support or resistance that it is.
An upward breakout or uptrend which was followed by the price trending above EMA 20 will not qualify as a Buy signal until EMA 20 is re-tested successfully.
Allow the price to fall and hit that EMA and if it bounces back from it by the next candlestick still closing above EMA 20, then the EMA re-testing was successful.
A downward breakout or downtrend followed by the price trending below EMA 20 also needs something more.
Allow the price to rise to the level of that EMA 20 and if it bounces back from the EMA by the next candlestick still closing below EMA 20, then the EMA re-testing was successful.
You know that the EMA re-testing can fail if the said candlestick closes either:-
- Below EMA 20 for prices trending above the EMA on an uptrend, or
- Above EMA 20 for prices trending below the EMA on a downtrend.
If re-testing fails, you would rather look for other trading opportunities elsewhere or look out for an opposing signal because your bias has just shifted to the opposite direction.
5. Buy or Sell Position.
Was your EMA 20 successfully re-tested on an Uptrend?
Then go ahead and enter a Buy position. Successful retesting means that the price will keep moving upward for quite some time.
If your EMA 20 was successfully re-tested on a Downtrend, then you can enter a Sell position. It means the price will keep falling for some time.
6. Stop Loss.
You can place your Stop Loss 2-3 Pips below the signal candlestick for your Buy position and 2-3 Pips above the signal candlestick for your Sell position.
7. Take Profit.
Depending on sound Risk to Reward Ratio, a profit target of 25-50 Pips will be enough.