Bladerunner is a simple trend following strategy that uses a 20-period exponential moving average (EMA) along with price action patterns.
The strategy can be traded across multiple currency pairs and also multiple timeframes, although it is most popular on shorter term timeframes.
Since it is a trend following strategy it works best with instruments that tend to have greater volatility, such as GBP/JPY or gold.
The buy signal is initially triggered when price falls back to the 20-period EMA in an uptrend. If price falls below the EMA but closes above it, this is still a valid buy signal. If price closes below the EMA the bias changes and there is no signal. The candle that fell and bounced off the 20-period EMA is called the signal candle. The buy entry takes place when the following candle forms and trades above the high of the signal candle. The buy entry can be made by placing a buy stop order just above the high of the signal candle.
The sell entry is initially triggered when price rises to the 20-period EMA in a downtrend. If price rises above the EMA but closes below it, this is still a valid sell signal. If price closes above the EMA the bias changes and there is no signal.The candle that rose and bounced off the 20-period EMA is called the signal candle. The sell entry takes place when the following candle forms and trades below the low of the signal candle. The sell entry can be made by placing a sell stop order just below the low of the signal candle.
In the case that you bought (entered a long trade) place a sell stop just below the low of the signal candle.
In the case that you sold (entered a short trade) place a buy stop just above the high of the signal candle.
Set your first profit target at the same distance as your stop loss. Place your second profit target at double the distance of your stop loss. Once you hit your first profit target, move your protective stop to where you entered the trade.
Look for additional confirmation for your trades in the form of horizonal support and resistance levels and classic price action patterns. For example, if a pin bar (reversal pattern) forms on the signal candle, that suggests a higher probability of success.
See also: Introduction to Price Action Trading Strategies, Directory of Trading Strategies