Lesson 2

Trend Continuation Entry

(Bounce Version 2)
FX M15

By Adam Khoo
[email protected]

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Trend Continuation Entry
The Trend Continuation Entry (TCE) is a strategy that seeks to long FX pairs as it makes
a dip on a strong uptrend and shorting FX pairs as it makes a rally on a strong
downtrend

Time frames: M15 optimal

Frequency: 10-15 trades a month
Average Win rate: 50%-60%
Risk to return Ratio: 1: 2
All FX Pairs : GBPUSD, EURUSD, USDJPY, USDCHF, USDCAD
Must use brokers with tight spreads of 1 to 2 pips maximum

Short the Rally

Long The Dip

d Do Stro
re n wn ng
p t tre
g U nd
n
Stro Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Defining an Uptrend
An FX Pair Is Defined to Be On An Uptrend When…

1) 18EMA is above the 50EMA. And, the 50EMA is above the 200SMA

2) Current Swing High is Higher than Previous Swing High… And Current Swing Low is
Higher than Previous Swing Low Current
high

Previous
Current high
high
Previous 18 ema
high
Current
Entry 50 ema Low
Previous
Current Low
Low
Previous
200SMA
Low
rend
p t
g U Copyright ©
n
t ro Adam Khoo Learning Technologies Group Pte Ltd 2018
S
 Defining a Downtrend
An FX Pair Is Defined to Be On An Downtrend When…

1) 18EMA is below the 50EMA. And, the 50EMA is below the 200SMA

2) Current Swing High is Lower than Previous Swing High… And Current Swing Low is
Lower than Previous Swing Low

Previous
Previous high 200SMA
high Current
Current 50 ema high
high
18 ema
Entry
Previous Previous
Low Low

Current
Do Stro Low
wn ng
tre Current
nd Copyright ©
Low
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Identifying A Support Level for Uptrends
• For Going Long On Uptrends, we want to see that the 'Current Swing Low’ is a
reliable support level
• A reliable support level is identified by….
• Price supported by moving average (18 EMA or 50EMA)
• OR at a Fibonacci Level (38.2%, 50% or 61.8%)

Current Swing high

Moving Average 18EMA or

Previous Swing high 50EMA

Fibonacci 38.2%, 61.8%, 50%

Current Swing Low

Previous Swing Low

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Identifying A Resistance Level for Downtrends

• For Going Short On Downtrends, we want to see that the 'Current Swing High’
is a reliable resistance level
• A reliable resistance level is identified by….
• Price resisted by moving average (18 EMA or 50EMA)
• OR at a Fibonacci Level (38.2%, 50% or 61.8%)

Previous
Swing high Current
Swing high

Fibonacci 38.2%, 61.8%, 50%

Previous
Swing Low
Current
Swing low

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Trigger for a Long Trade

• When Price is at a reliable support level on an uptrend dip, we initiate a

long entry when we have a ‘Trigger’ from the Price action
• The ‘Trigger’ will be a Bullish Engulfing Candle or a Breakout from a
Consolidation of Candles

Bullish Engulfing Candle

• A Bearish candle followed by a Bullish Candle
• Body of the Bullish Candle fully Engulfs Body of the Bearish Candle

Entry: Buy Stop

Support
Stop Loss

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Trigger for a Long Trade

• When Price is at a reliable support level on an uptrend dip, we initiate a

long entry when we have a ‘Trigger’ from the Price action
• The ‘Trigger’ will be a Bullish Engulfing Candle or a Breakout from a
Consolidation of Candles

Breakout from a Consolidation of Candles (at least 4)

• Four or more relatively small candles consolidate at the support level
• Enter upon price breaking above the high of the consolidation

Entry: Buy Stop

Support Stop Loss

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Trigger for a Short Trade

• When Price is at a reliable resistance level on an downtrend rally, we

initiate a short entry when we have a ‘Trigger’ from the Price action
• The ‘Trigger’ will be a Bearish Engulfing Candle or a Breakout from a
Consolidation of Candles

Bearish Engulfing Candle

• A Bullish candle followed by a Bearish Candle
• Body of the Bearish Candle fully Engulfs Body of the Bullish Candle
Stop Loss
Support

Entry: Sell Stop

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 Trigger for a Short Trade

• When Price is at a reliable resistance level on an downtrend rally, we

initiate a short entry when we have a ‘Trigger’ from the Price action
• The ‘Trigger’ will be a Bearish Engulfing Candle or a Breakout from a
Consolidation of Candles

Breakout from a Consolidation of Candles (at least 4)

• Four or more relatively small candles consolidate at the resistance level
• Enter upon price breaking below the low of the consolidation

Resistance Stop Loss

Entry Sell Stop

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup Entry Rules
1) FX Pair on an uptrend (M15 Candles)
1) Price> 18EMA > 50EMA > 200SMA
2) Current Swing High higher than Previous Swing High, Current Swing low higher than Previous
Swing Low
2) Higher time frame H1candles on Uptrend (Price>18EMA>50EMA>200SMA)
3) Current swing low is at a Reliable Support
1) Moving average support (18EMA, 50EMA) AND/OR
2) Fibonacci level 38.2%, 50% or 61.8% Bullish Engulfing
4) Trigger For a Long Trade
1) Bullish Engulfing Pattern
2) Consolidation of 4 or more Small Candles

Current Swing high Consolidation (>=4 candles)

Previous Swing high

Fibo level
Current Swing Low
= Fibonacci level and/Or EMA support

Previous Swing Low

Copyright ©
EMA Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup Entry Rules
5) Entry: Buy Stop Order above Engulfing Pattern OR Consolidation (round to nearest pip+ spread)
6) Stop Loss: Place a Sell Stop Order just below the Current Swing Low
7) The stop loss distance (Entry to Stop Loss) will be the 1R distance. This should be at least 8 pips
8) Target Price: Sell Limit Order 2R above the entry price.

Low Risk Filters

• No major news release within the next 10 candles (i..e 150 mins for M15)
• Exit before major red news if stop loss or Target profit not reached

Target Price
Current Swing high

2R
Previous Swing high
Entry
Fibo level 1R Current Swing Low
Stop loss

Previous Swing Low

EMA Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
M15 TCE Long Setup -GBPUSD
Previous swing high
Target Price Sell Limit Order 1.3534

GBP USD 2 Jan Current swing high

18EMA>50EMA>200SMA 2R =18 pips

Entry Buy Stop Order 1.3516

Bullish Engulfing 1R =9 pips

Stop Loss
Sell Stop Order 1.3507

Previous swing low

Current swing low @

50EMA support

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup- GBPUSD
H1 H1 Must Be Aligned

ENTRY
GBPUSD 2 Jan

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup- GBPUSD
Target price Reached

Target Price
Sell Limit Order 1.3534

Entry upon price break

above high of Engulfing
Pattern

Entry Buy Stop Order 1.3516

Stop Loss
Sell Stop Order 1.3507

Bullish Engulfing
M15
TCE Long Setup -CHFJPY
Sell Limit Order 1.3534

Target Price
CHFJPY 16 May
Current swing high
18EMA>50EMA>200SMA 2R =16 pips

Previous swing high

Buy Stop Order 1.3516
Entry

1R =8 pips

Consolidation Stop Loss

Sell Stop Order 1.3507

Previous swing low Current swing low @

50EMA support

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup- CHFJPY
H1 H1 Must Be Aligned
ENTRY

CHFJPY 16 May

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Long Setup- CHFJPY
Target price Reached

Sell Limit Order 1.3534 Target Price

Entry upon price break

above high of
Consolidation Pattern

Entry Buy Stop Order 1.3516

1R =8 pips

Stop Loss Sell Stop Order 1.3507

Consolidation
 M15 TCE Long Setup -USD JPY

Previous swing high Current swing high

Target Price
USD JPY 18 Oct Sell Limit Order 113.05
18EMA>50EMA>200SMA
2R =18 pips

Buy Stop Order 112.96

Entry

4 candle consolidation 1R =9 pips

Stop Loss
Sell Stop Order 112.87

Previous swing low

Current swing low
at 50MA support
 TCE Long Setup- USD JPY
H1 Must Be Aligned
H1
ENTRY

USD JPY 18 Oct

 TCE Long Setup- USD JPY
Target price Reached
Sell Limit Order 113.05

Target Price

Entry upon price

breakout of
consolidation
Entry Buy Stop Order 112.96

Stop Loss Sell Stop Order 112.87

 M15 TCE Long Setup -NZDUSD

Current swing high

NZD USD 28 Dec Previous swing high

Buy Stop Order 0.7104 Entry
18EMA>50EMA>200SMA
Bullish
1R =8 pips Engulfing

Sell Stop Order 0.7096 Stop Loss

Current swing low @

18EMA support
Previous swing low
 TCE Long Setup- NZDUSD
Current Swing Low is also a Fibo 38.2% Level

NZDUSD 28 Dec

38.2%
 TCE Long Setup- NZDUSD
Target price Reached

Target Price Sell Limit Order 0.7120

Entry upon price break

above high of Engulfing 2R =16 pips
Pattern
Entry Buy Stop Order 0.7104

1R =8 pips
Stop Loss Sell Stop Order 0.7096

Bullish Engulfing
 TCE Short Setup Entry Rules
1) FX Pair on an downtrend (M15 Candles)
1) Price< 18EMA < 50EMA < 200SMA
2) Current Swing High Lower than Previous Swing High, Current Swing low lower than Previous
Swing Low
2) Higher time frame H1 candles on downtrend (Price<18EMA<50EMA<200SMA)
3) Current swing high is at a Reliable Resistance
1) Moving average resistance (18EMA, 50EMA) AND?OR
2) Fibonacci level 38.2%, 50% or 61.8%
4) Trigger For a Short Trade
1) Bearish Engulfing Pattern
2) Consolidation of 4 or more Small Candles
Bearish Engulfing

Consolidation (>=4 candles)

Previous
EMA Swing high Current
Swing high
Fibo level
Current Swing High
Previous = Fibonacci level and/Or EMA Resistance
Swing Low
Current Swing low
 Short Setup Entry Rules
5) Entry: Sell Stop Order below Bearish Engulfing OR Consolidation (round to nearest pip+ spread)
6) Stop Loss: Place a Buy Stop Order just above the Current Swing High
7) The stop loss distance (Entry to Stop Loss) will be the 1R distance. This should be at least 8 pips
8) Target Price: Buy Limit Order 2R below the entry price.

Low Risk Filters

• No major news release within the next 10 candles (i..e 150 mins for M15)
• Exit before major red news if stop loss or Target profit not reached

Previous
Swing high Current
EMA Swing high
Stop loss
1R
Fibo level Entry
2R
Previous
Swing Low Target Price
Current
Swing low
Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
M15 TCE Short Setup- GBPUSD

GBPUSD 11 Jan Apr

18EMA<50EMA<200MA
Current
Previous swing high
swing high at 50EMA

Stop Loss Buy Stop

Order 1.3498

Bearish 1R =13 pips

Engulfing

Sell Stop
Previous Entry Order 1.3485

swing low
Target Price 2R =26 pips
Buy Limit Order 1.3459
Current
Copyright © swing low
Adam Khoo Learning Technologies Group Pte Ltd 2018
 TCE Short Setup-GBPUSD
GBPUSD 11 Jan H1 is Aligned
18EMA<50EMA<200MA

ENTRY
M15 TCE Short Setup- GBPUSD
Target price Reached

GBP USD 11 Jan

Stop Loss
Buy Stop
Order 1.3498
1R =13 pips
Entry
Sell Stop
Order 1.3485

2R =26 pips
Target Price
Buy Limit Order 1.3459
M15 TCE Short Setup- EURUSD

EURUSD 25 Apr
18EMA<50EMA<200MA Previous Current
swing high swing high
at 50EMA & 61.8%

Buy Stop
Order 1.2216

Stop Loss
Bearish 1R =11 pips
Engulfing
Entry
Sell Stop
Order 1.2205
Previous
swing low
Target Price 2R =22 pips
Buy Limit Order 1.2183

Current
swing low
 TCE Short Setup-EURUSD
Resistance is a Fibo 61.8% Level

EURUSD 26 Apr
18EMA<50EMA<200MA
M15 TCE Short Setup- EURUSD
Target price Reached

EURUSD 26 Apr

Stop Loss
Buy Stop
1R =11 pips Order 1.2216

Entry
Sell Stop
Order 1.2205

2R =22 pips
Target Price
Buy Limit Order 1.2183
 TCE Short Setup- USDCAD

USDCAD 4 Apr 18EMA<50EMA<200MA

Previous Current
swing high swing high
at 50% Fibo Level

Previous Buy Stop Stop Loss

Order 1.2279
swing low Bearish
1R =8 pips
Sell Stop Engulfing
Order 1.2271 Entry

2R =16 pips

Buy Limit Order 1.2755 Target Price

Current
swing low
 TCE Short Setup-USDCAD
Resistance is a Fibo 50% Level

USDCAD 4 Apr 18EMA<50EMA<200MA

 TCE Short Setup- USDCAD
Target price Reached

USDCAD 6 Apr

Buy Stop
Stop Loss Order 1.2279

1R =8 pips
Sell Stop
Entry Order 1.2271

2R =16 pips

Target Price
Buy Limit Order 1.2755

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 High Probability TCE Setups
For the TCE setups with the highest probability of success, I look for …

1) Price retrace to a Moving Average Support/Resistance AND

2) Moving Average Support/Resistance has been recently tested to be reliable
3) Price retracement to a Fibonacci level (50%, 61.8%) is an Added Bonus
4) Price has not moved too far from the current swing low (for longs) and current
swing high (for shorts)
5) Price is not too near the current swing high (for longs) and current swing low (for
shorts)
6) Stop loss is also below a tested support on H1 (long setups) and above tested
resistance (for short setups)

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
 High Probability TCE Setups
For the TCE setups with the highest probability of success, I look for …

1) Price retrace to a Moving Average Support/Resistance AND

2) Moving Average Support/Resistance has been recently tested to be reliable
3) Price retracement to a Fibonacci level (50%, 61.8%) is an Added Bonus
4) Price has not moved too far from the current swing low (for longs) and current
swing high (for shorts)
5) Price is not too near the current swing high (for longs) and current swing low (for
shorts)
6) Stop loss is also below a tested support on H1 (long setups) and above tested
resistance on H1 (for short setups)

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018
USDJPY M15 Support at 18EMA
TP

Entry
SL
 USDJPY H1 Support at 6EMA
TP
Entry
SL

On H1 timeframe, our SL is below

the 6EMA support
NZDUSD M15 Support at 18EMA
TP

Entry

SL
NZDUSD H1 Support at 6EMA
TP

Entry
SL
On H1 timeframe, our SL is below
the 6EMA support
AUDCHF M15 Support at 50EMA

TP

Entry

SL
 AUDCHF H1 Support at 18EMA/50EMA

TP

Entry
SL

At H1 time frame, our SL is above

the 18EMA/50EMA support
 Lesson 2
Trend Continuation Entry
FX M15

By Adam Khoo
[email protected]

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2018