The Jarroo Strategy: Trading Price Action Levels

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The Jarroo Strategy: Daily Price Action Levels

The Jarroo Strategy is a pure price action method based on key support and resistance levels derived from candle closes. It focuses on the Daily (D1) timeframe to identify major levels where price was unable to close above (Resistance) or below (Support), offering high-probability breakout opportunities.

Strategy Profile

Timeframe

D1 (Daily)

Type

Price Action

Key Concept

LCS / HCR

1. Identifying Levels (The Setup)

This strategy does not use indicators. Instead, you must manually draw levels based on specific rules:

  • LCS (Lowest Close of Support): Identify a swing low where at least two candles share the same closing/opening price at the bottom. This is a support level price could not close below.
  • HCR (Highest Close of Resistance): Identify a swing high where at least two candles share the same closing/opening price at the top. This is a resistance level price could not close above.
Jarroo Strategy HCR and LCS Levels
Figure 1: Identifying HCR and LCS levels on the Daily chart

2. Entry Rules (Breakout & Close)

We trade when these key levels are breached. The specific definitions are:

  • PBT&CA: Price Breaks Through & Closes Above.
  • PBT&CB: Price Breaks Through & Closes Below.

Buy Signal

Wait for the price to break through and close above the HCR level. Place a pending Buy order at the level after the candle closes.

Sell Signal

Wait for the price to break through and close below the LCS level. Place a pending Sell order at the level after the candle closes.

Jarroo Strategy Breakout Entry
Figure 2: Breakout and Close entry example

3. The DCC Rule (Conservative Entry)

For a more conservative approach, use the DCC (Daily Close Confirmation) rule:

  1. After the “signal” candle breaks the level, wait for the next candle to close.
  2. Only if this second candle also closes above/below the level (without reversing), place the pending order.
Jarroo Strategy DCC Entry Rule
Figure 3: Placing a limit order after Daily Close Confirmation

Risk Management

  • Stop Loss: Place beyond the High/Low of the breakout candle. If too close, use the previous candle’s High/Low.
  • Take Profit: Target the next support/resistance level or use a 2x/3x multiple of the Stop Loss.
  • Trailing Stop: Activate after reaching the first target.

Master Price Action: Trade key levels without indicators and earn rewards with FXRebate.

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