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The Bladerunner Trade

The Bladerunner is a forex price action strategy trading strategy that uses pure Price Action to find entries. We use candlesticks, pivot points, round numbers and good old support and resistance levels when trading with this strategy.No off-chart indicators (those appearing below the chart window in their own window, e.g. RSI, stochastics, MACD etc) are necessary, but you may include your favourite if you find it useful or feel more comfortable having some extra confirmation. Some people might wish to incorporate Fibonacci levels and that’s fine, too.The only indicator We  use with this strategy is an on-chart indicator, the 20 EMA. An alternative is to use the midline of the standard 20 Bollinger bands. Either works well, in fact you can use both to trade it as a Bollinger band EMA strategy. The examples here will be using the 20 EMA.

This setup can be traded on any pair. It can also be traded on any time frame, but the examples below are from 5 min charts.It can be traded at almost any time of the day, but obviously some times are more reliable than others. For example, the early part of the Asian session may provide a decent break out and retest giving an entry, whereas the Asian afternoon session can be very slow. Then, when London opens the price may be too erratic and volatile to give any reasonable entries for any strategy.Later again, after the initial flurry of news announcements has passed and price has settled, you may once more get a reliable entry or two. You will therefore have to adjust this strategy to the times when you are able to trade it.The strategy is named Bladerunner because the 20 EMA acts like a knife edge dividing price. If price is above the EMA, and respecting it, and retests the EMA, it will likely reject to the long side. And if price is below the EMA, and respecting it, and retests the EMA, it will likely reject to the short side. A few examples might help to clarify:

Bladerunner
Bladerunner Figure 1
Bladerunner
Bladerunner Figure 2
Bladerunner
Bladerunner
Bladerunner Figure 4

What constitutes a successful retest?

If price is above the EMA it must bounce from and stay above the EMA; and vice versa for when price is below the EMA. More specifically: The first candle that touches the EMA should close on the same side of the EMA as it approached it from.This then becomes the signal candle. Price has now rejected from the EMA and we are looking to see if the next candle confirms the move. If the next candle continues the move away from the EMA then this candle becomes the confirmatory candle. This is a simple way to trade the strategy; if you want to play it safer you could insist on a recognisable forex candlestick pattern occurring to confirm the trade.N.b. if the Bladerunner seems simplistic, it is because forex price action and current fundamentals are factored into trading decisions. No entry is ever taken based purely on price having rejected from the 20 EMA.

Bladerunner Trade Using Forex Polarity Indicator
Bladerunner Trade Using Forex Polarity Indicator

The yellow stream is the forex polarity indicator, consisting of the 20 EMA and the Bollinger mid-band plotted together. These settings are configurable for those who like to experiment.The white circle indicates a morning star forming at the polarity indicator. Had you only been using one or the other of the individual indicators, you may have deemed this not to be a valid signal as it may not have actually touched it. This is one advantage to using the polarity indicator. Personally, I just prefer it as a visual representation to take my bearings from.So, that’s a wrap for the Bladerunner. Hope you enjoyed it, and if you do decide to trade it I’m sure you will find it a fascinating, easy and hopefully, profitable forex trading strategy!

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