(Draw an Channel or to use an indicator channel)
After a channel has been broken, I will look for pullback – price to come back to the channel and retest support\resistance. If price touches the resistance\support and bounces from it, I will take the trade. There are rules of entry, which are a bit different for short and long trades.
How to Take Profit
Calculate size of channel – substract the resistance value from support value. This is the target.
Add this amount to the price where the pullback occured – and this is your take profit. Move it several pips closer, to have some safety margin in case price comes very close to your take profit but don’t actually touch it.
When not to trade
-Don’t trade if the ratio between your Stop Loss and your TakeProfit is not at least 2.
-Don’t trade if there is a strong support\resistance blocking your way to the target.
-Don’t trade if this is the second time price pullbacks. Only trade the first pullback.
In the pictures examples how to works this strategy.