Trading EURUSD | Judas Swing Strategy 01/10/2024

10月3日

The Judas Swing strategy is straightforward and can be incorporated into any trader's toolkit. It is a well-tested approach that has shown effectiveness when its guidelines are adhered to. The strategy offers a favorable risk-reward ratio, risking 1% to potentially achieve a 2% return. In this post we intend to walk you through a recent trade we took on EURUSD using this strategy.

We arrived at our trading desk at 08:25 EST, where we began by demarcating the zones for the trading period. This involves drawing vertical lines on the 00:00 and 08:30 EST candles. Following this, we mark the highs and lows within these zones, as they will serve as the liquidity pools for our trading session.


The subsequent step on the checklist is to observe whether the high or the low of this trading zone is breached, as it will guide our bias for the trading session. Five minutes later, the low of the zone was breached, indicating that we should be on the lookout for potential buying opportunities during this session.


Even with a bias for the session, we don't execute the trade blindly. The next step on our checklist is to wait for a break of structure to the buy side. This break of structure must leave a Fair Value Gap (FVG) behind.


Once the structure is broken and the fair value gap (FVG) conditions are met, the next step is to wait for the price to retrace back into the FVG. A trade should only be entered after the candle that moves into the FVG has closed. After 10 minutes, price retraced and closed within the Fair Value Gap, fulfilling all the conditions on our entry checklist, allowing us to execute our trade.

For stop placement, we use the lowest point of the price leg that broke the structure, provided it satisfies specific conditions. The minimum stop loss applied is 10 pips because a tight stop loss is not desirable, as it doesn't allow the trade sufficient room. In this instance, using the low would have resulted in a 4 pips stop; therefore, we extended it to a 10 pips stop loss with a 20 pips take profit and executed the trade.


It's important to note that we risked only 1% of our trading account, an amount we're comfortable with losing, thereby eliminating any emotional attachment to this trade. Consequently, we are at peace with the outcome of this trade, be it a win or a loss.

The result of this trade was a loss, which we accepted because we understand that the win rate for this strategy on EURUSD is around 50%, indicating that losses are inevitable with this strategy. However, as our winning trades typically outweigh our losses over time, this strategy should yield positive returns, making it unnecessary to focus on a single loss. Moreover, this post serves as a tutorial on how to trade using the Judas swing strategy and emphasizes that incurring losses is a normal aspect of trading.