This strategy was coined by the American forex trader Kathy Lien. The technique involves identifying areas in a currency pair where the price approaches a “double zero,” such as 0.7200 in NZDUSD or 1.1200 in EURUSD. The idea is that these areas represent natural support or resistance for thousands of traders, and therefore, one can trade based on the rejection.
In other words, you go short if the price is approaching the double zero from below, and long if the price is approaching the double zero from above.
You set a stop for both trades at 35 pips in the opposite direction. The first trade is closed when it is in profit by 35 pips, and then you set a stop to breakeven for the last trade, letting it run – potentially to the next natural resistance.You can optimize the strategy by adding a 20-period moving average on a 15-minute chart. In this case, you only go “long” if the price is also below the moving average, and vice versa for a “short” trade.
Fading the zeros strategies
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