DETERMINE THE SUPPORT AND RESISTANCE LINES ON LAST DAILY CANDLE
Example on how to draw the Support and Resistance lines:
Open your chart and switch to daily time-frame
Scenario 1 – Bullish candle (price close above Open)
Ignore the Low of the Day and Closing Price
High of the Day 0.6733
Open Price 0.6684
*Draw the line on High (0.6733 as Resistance) and draw the line on Open (0.6684 as Support).
Scenario 2 – Bearish candle (price close below Open)
Ignore the High of the Day and Closing Price
ENTRIES AND EXITS
Enter the trade when the 5-minute bar penetrates and close higher than the Resistance level.
Enter the trade when the 5-minute bar penetrates and close lower than the Support level.
Exit the trade when the 5-min bar closing price is greater than your stop-loss value. For example if your stop-loss on EUR/USD is about 20 pips and if it closes more than that, exits the trade.
My risk-reward ratio is 1:1 so if I set my SL to 20 pips, my TP would be 20 pips. However, if you want to make more pips than that, I recommend entering with 2 or more lots and then exit the first TP target of 20 pips then move your SL to breakeven in order to let the winner runs.
WHICH CURRENCY PAIRS TO TRADE?
I’ve tested on EUR/USD, GBP/USD and GBP/JPY successfully. The numbers of winning trades were overwhelming during my testing period. I believe this technique can be executed on more pairs but that would require further testing to confirm it. The three pairs that I mentioned should be enough to quench your thirst for pips.