The simple Slingshot trading method

Hello

There are a few trading methods being shared around the forums and websites with the name slingshot in them and as you might have already guessed, they are not all the same and are may be very different from one another. Some of them are even quite complex. However, the one I will be writing about here is the easiest one of all and very easy to use.

You should know that this is a pure price action based method and no indicators at all is going to be used on the charts. The system can work with any pair but however, I suggest we use pairs like GBPUSD or GBPJPY as they has incredible amount of valatility and momentum, therefore they jump around a lot.

Step 1

First of all, we need to determine the current trend of the pair. There is really no specific and clear cut method to do that. The method that most people use to determine the trend is to use Moving Averages with a longer period setting such as the 100 or 200. If price is above these moving averages and the shorter moving averages are above the longer ones, then the trend is said to be going up. The opposite will tell us that the trend is going down. We can also use multiple timeframes to determine the trend, like referring to the next higher timeframe that comes after the one we are working on. For example, if we are working on H1, we look for the trend at H4. There are many many different methods to determine the trend and I suggest you do some research on this before you continue with this strategy. I wont be able to cover all the methods here.

Step 2

After we have determined the trend of the pair, then we need to watch for the OPENING of the new DAILY candle. The time this is going to happen is totally dependant on the time of your broker and it will be different from broker to broker... It happens at 00:00 on your own broker time. So, we need to watch this opening of the NEW DAILY candle on the DAILY timeframe.

Step 3

In this step, we should sit and wait for the price to go AGAINST the trend for around 30-50 pips. This trend, we should have already identify it in step 1.. hope you remember. So, if the trend is up, we will want the price to move DOWN (against the UP trend) for some 30-50 pips... And if the trend is DOWN, we are expecting the price to move 30-50 pips UP (against the DOWN trend). This should happen almost after the open of the daily candle in the first 4-6 hours WITHOUT retracing back to the OPEN of the daily candle.

Step 4

After, price has made a significant move against the trend, then we need to place a pending order in the SAME direction of the current trend 20 pips from the OPEN of the NEW candle. If the trend is up, we are going to place a pending buy order 20 pips above the open of the new daily candle and if the trend is down, then we are going to place a pending sell 20 pips below the daily candle. So, what we are doing here is that we are taking advantage of the main trend, we already know that price will always return to the main trend sooner or later.. So, after this 30-50 pips move against the trend, the price is expected to move back in the original direction of the trend and when it will do so, it will pass by our pending orders and will get us filled.

Screenshot of Method

Below you can find a screenshot which can give you an idea on the method and what it does. As you can see, we have used the H1 for the screenshot so that we can zoom in and show the moves which occured. On the daily chart,we would not be able to see these moves. The purple line shows the open of the daily candle and as you can see, price moved around 40 pips away from this purple line, and in the meantime when this happens, we need to place our pending order. So here the trend is UP, so we place our pending buy order... Now you see what happens a few hours later... price just return back to the purple line, breaks it and keep going UP as the trend is UP. Our order gets filled and we ride with the profits. You can do it as well.

Finally...

The last part of this method is the setting up of your stoploss and takeprofit levels. Both of these levels has been left as they are very discretionary. This is where you can make the system adapt to your own risk/reward preference. You can use any kind of money management method with the system which you deem good to make the system become a winner. You can use fixed stoplosses and takeprofit, or you can use a dynamic trailing stop, or you can even move stops manually based of S/R or fibo levels, this is left solely on your own to figure out.

As far as the method is concerned, the system should be working fine as it is and you should be able to get out with good profits most of the times. And during bad moves, you will be getting out breakeven as well if you move your stoploss to breakeven each time the trade are in profit for a few dozen of pips. So, take some time to learn and practice the method on a demo account before deciding to do anything other with it. As with any free method, you can bring modification and improvement to it and it will be much appreciated if you can share it with us. All thanks goes to the original sharers of this method. All the best with your trading.