Trading AUDUSD | Judas Swing Strategy 21/08/2024

Last week, the Judas Swing strategy produced just two trades, both on EURUSD. It served as an excellent lesson in risk management; despite having one win and one loss, we concluded the week with a profit, securing a 1% gain. Even during a slow week, we concluded on a positive note, and it's these small victories that sustain a trader's enthusiasm for the new opportunities each week brings. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises:
- Setting the timezone to New York time
- Confirming we're on the 5-minute timeframe
- Marking the trading period from 00:00 - 08:30
- Identifying the high and low of the zone


We now wait for the high or low of the trading zone to be swept, which would guide our bias for the session. After 1 hour and 35 minutes, the low of the zone was swept, indicating that we should look for buying opportunities during this trading session


After 35 minutes, there was a break of structure (BOS) to the buy side, leaving behind a Fair Value Gap (FVG). Now, all that remains is to patiently wait for price to retrace into the FVG, presenting us with a trading opportunity


The subsequent candle formed a bearish marubozu, closing the gap left from the previous upward move. We executed our trade after the candle's closure, as it met all the criteria on our checklist


After executing our trade, we experienced minimal drawdown as the position quickly turned profitable. These are the types of trades we all hope for, aren't they?


All we need to do is wait for our Take Profit (TP) to be reached, right? Let's observe the outcome. Price got close to our TP and then began retracing. This is the moment when traders who have not thoroughly backtested their strategies might panic and close their trades prematurely. Some may consider moving their stop loss to break even; however, our backtesting data shows that this approach does not benefit us in the long run, as price may hit the break even point and then proceed in our anticipated direction. Therefore, in such situations, we should not panic; instead, we patiently wait for either our TP or Stop Loss (SL) to be triggered.


Price returned to our entry point, and at this juncture, traders who risked more than they could afford are likely experiencing an emotional roller coaster. However, we remained undisturbed since we only risked 1% on this trade with the aim of achieving a 2% return


After 3 hours and 30 minutes, our Take Profit was triggered, and our patience paid off as we hit our target on AUDUSD, resulting in a 2% gain from a 1% risk on the trade.This trade served as an excellent illustration of the importance of patience and adherence to your trading plan. We hope you have gained some insights from this.