Suggested currency pair: GBP/USD
Timeframe: Daily, 1H
Indicators: 20 period SMA with 0.5% envelope applied, 14 period ATR
Long at open of next bar when price close above the upper bound of the envelope. Initial stop loss is ATR of the signal bar.
Short at open of next bar when price close below the lower bound of the envelope. Initial stop loss is ATR of signal bar.
If trade is stopped out, we will wait until a new trading signal appears.
If the trade is going for us, we will keep our trade open until the opposite trade signal appears.
Price close at 1.4696, which is above the upper bound of 1.4564. The ATR is 191 and will be our stop loss size.
Long at 1.4696 with initial stop loss placed at 1.4505.
Closed trade at 1.5575 when Short trade signal appeared for a profit of 879 pips on risk of 191 pips.
Short signal appeared and we close out our previous long and reverse our position to turn short.
We shorted at 1.5575 with a stop loss at 1.5724, a 149 pips stop loss.