One of the simplest and almost effective trading strategies in the world, is simply trading toll action signals from horizontal levels on a price chart. If you learn only one thing from this site it should be this; await for obvious price activeness patterns from cardinal horizontal levels in the marketplace. If you merely stick to that 'formula' you will accept plenty of high-probability trading opportunities over the class of one year. Don't over-complicate the process of analysing the markets / charts and finding trades. The market will generate signals for you lot when information technology's set, all you need to do is learn what the signals await like and where to look for them at. This is what you will learn in this lesson…

Price action signals + Horizontal levels = Success

Information technology doesn't really affair which component you detect first, the toll action signal or the level. What matters is if the two have come together to form a confluent price action trade. When yous have an obvious price action signal, like a pin bar or a fakey betoken, and that betoken has formed at a fundamental horizontal level of support or resistance in a market place, you lot have a potentially very high-probability trade on your hands.

Key horizontal levels of support or resistance are areas or levels on the nautical chart that price made a strong move either up or downwards from. They tin can be used in any market status; trending, counter-trend or trading ranges. The of import matter we are focusing on in this lesson is finding a clear price action point at a central chart level. These levels tend to act similar 'magnets', attracting cost to them before toll pushes abroad once again. They can also be thought of every bit 'value areas', or areas on the chart where toll found 'fair value' which typically happens before a strong movement occurs once again.

Let's take a look at some examples of trading cost action signals from central chart levels:

The chart below is a daily Gilded chart and it shows u.s.a. a nice articulate instance of a well-formed pin bar design that formed at a fundamental horizontal level in the market place. Conspicuously, the 1170.00 was already an of import horizontal level that yous should have had marked on your chart before this pivot bar formed. And then, all you needed to do was sit down and expect for a signal to form at or almost that level. We tin see a very nice pin bar purchase point did form at that level, showing a rejection of information technology that indicated price might push button college in the coming days..

simpleststrategy1

The next example is of a pin bar buy signal that formed at a key nautical chart level of support in an upwardly-trending market place. When you go a price action point that has confluence with a trend and a level, that is a proficient-quality merchandise setup. You won't find a much better example than the i below that formed on the daily GBPUSD chart. Nosotros had an uptrend, a key horizontal support level well-nigh 1.6655 and so a very well-defined / 'perfect' pin bar trading strategy formed at that level. You can meet the trend resumed the very next solar day afterwards that pivot bar as price continued pushing higher.

simpleststrategy2

In the chart below, the NZDUSD was trading in a large range, back and forth betwixt horizontal support and resistance levels. In these situations, where a market is range-bound, we can expect to the boundaries of the range (support and resistance levels) for potential cost action buying or selling opportunities. We can see a fine example of this in the nautical chart beneath when an obvious pin bar sell bespeak formed from the horizontal resistance of this trading range, setting off a huge motion lower, to the bottom of the range…

simpleststrategy3

Finally, let's look at a counter-trend case of trading price action signals at key chart horizontal levels in the market. This is the EURUSD daily chart and nosotros can see a very obvious fakey trading strategy formed at a primal resistance level virtually i.3950. This fakey signal showed a rejection and false breakout of that level, indicating that the bulls were wearied and that toll may fall lower in the coming days. We can see that toll did autumn from that fakey signal and it brutal significantly lower in the ensuing days. Some other articulate case of the ability of trading price action signals at key horizontal levels in the market.

simpleststrategy4

Conclusion

The main signal of this lesson is simply this: You DO Not Need a complicated or confusing trading strategy to find high-probability entries in a market. All you need is the ability to recognize price action trading strategies at fundamental chart levels of horizontal support and resistance. If you just focus on this one strategy and really 'master' it, you lot will be able to look at whatever chart of whatsoever market and find high-probability price action trading opportunities.

I hope you've enjoyed this lesson on the simplest trading strategy in the earth. To larn more, visit the price action trading university.