The simplest trading strategy in the world. One of the simplest and most effective trading strategies in the world, is to only trade price action signals from horizontal levels on the price chart. If you only learned one thing from this site, this should be it; look for clear price action patterns from the main horizontal level in the market.if you just stick to the 'formula', you will have many high probability trading opportunities for one year. Don't over complicate the process of analyzing markets / charts and finding trading opportunities. The market will produce a signal for you when it's ready, all you need to do is learn what the signal is like and where to look for it.this is what you will learn in this lesson ...
Price action signal + Horizontal level = Success
It doesn't matter which component you find first, the price action signal or level. What matters is if the two come together to form a confluent price action trade.when you have a clear price action signal, such as a pin bar or a fake signal, and that signal has formed at the key horizontal level of support or resistance in the market, you have a very high possibility of trading in your hands.
The key horizontal level of support or resistance is the area or level on the chart where prices make strong movements either up or down.they can be used in any market condition; uptrend, trend reversal, or trading range. The important thing that we focus on in this lesson is finding clear price action signals at the main chart level. These levels tend to act like a 'magnet', pulling prices on them before they push again.they can also be considered as areas of ’value areas, or areas on the chart where prices find fair value values’ which usually occur before strong movements occur again.
Let's look at a few examples of price action trading signals from the main chart level:
The chart below is a daily Gold chart and this shows us a good clear example of a well-formed pin bar pattern formed at key horizontal levels in the market.obviously, 1170.00 is already an important horizontal level that you should mark on your chart before this pin bar is formed. Then, all you need to do is sit and wait for the signal to form at or near that level.we can see a very good pin bar buy signal forming at that level, showing a rejection which indicates the price may push higher in the coming days.
The next example is a pin bar buy signal formed at the key level of the support chart in a market that is trending up.when you get a price action signal that matches a trend and level, it is a good quality trading arrangement. You will not find a much better example than the one below which is formed on the daily GBPUSD chart.we have an uptrend, the main horizontal support level near 1.6655 and then a very perfect / ‘perfect’ pin bar trading strategy is formed at that level.You can see the trend returning the next day after the pin bar because prices continue to push higher.
In the chart below, NZDUSD trades in a large range, alternating between horizontal support and resistance levels.in this situation, where the market is range-bound, we can see range limits (support and resistance levels) for potential buying or selling price action.we can see a good example of this in the chart below when a clear pin bar sell signal is formed from the horizontal resistance of this trading range, triggering a large move lower, to the bottom of the range.
The main point of this lesson is simply this: You DO NOT NEED complicated or confusing trading strategies to find high probability entries in the market.what you need is the ability to recognize price action trading strategies at key chart levels of horizontal support and resistance.if you only focus on this one strategy and really 'master it', you will be able to see any chart from any market and find high probability price action trading opportunities.
I hope you enjoyed this lesson about the simplest trading strategy in the world.