Forex strategy No1 - John Carter's Box Play Strategy

A very easy yet effective free forex strategy i've discovered reading John F. Carter's book : "Mastering the trade" - a great book about trading any financial market in general(it's not focused on forex trading but it has some examples from the forex market and an excellent chapter on trader's psychology which is a must read).

This free forex strategy works on any timeframe. As John Carter describes it the box play is a momentum play, the trader will buy a breakout and short a breakdown. A picture is worth a thousand words so:





As you can see in the picture, in order for this strategy to set up you need 4 points, 2 resistances and 2 supports. Once you identify those points if you draw a horizontal line you will get a box hence the "box play" strategy. The 2 supports and 2 resistance musn't be identical (to the pip), you can adjust the support or resistance line to the most recent S/R point. When i first draw the support line it was touching point 1 but after point 3 i've moved the support line to the new support wich was a few pips higher.

Usually after the 4th point you get a return towards the middle of the box and than a breakout/breakdown. Your entry is when either support or resistance line is breached. After you see a setup like this you can put 2 orders: a long order 3 pips above resistance and a short order 3 pips bellow support. Both your stop loss and profit target will be the length of the box. This strategy has 1:1 risk/reward ratio but it has a very high winning percent ratio (around 80%).