Nice day traders,
In this article, I am going to mention and explain some helpful and simple strategies for newbies. If doing your research out there, you will discover many strategies promising fast and certain profit. They are described by their creators as the “holy grail” and also lots of times that it needs to subscribe in order to take a strategy together with its indicators without realizing if this strategy actually works. A great number of them don’t work or they just work for short term periods and they don’t have to be added value in the long term run. From my practical experience, it can be easy for you to find all these paid strategies for free and eventually there is nothing special about them. Now, it is the time for me to explain you some reliable and simple strategies based on both logic and reality.
“Support and resistance” is known as the most popular strategy for the new traders, especially. It allows you to identify the right spot and gives you a chance to take call trades in a support area and put trades in a resistance area as well. Therefore, what can you do to identify these areas? There are several ways for you to do this. Let’s see! And, one of them is to mind that how the price acted in older areas and you should try to forecast the price movement as the price goes back to these areas. You can see this is the entire value of technical analysis. Truly, it is the action of predicting the future through studying the price behavior performed in the past.
In the above chart, it shows about trading opportunities, puts in the previous resistance and calls in the previous support as the price goes back in order to test again this area. A ranging market in which S&R keep the price into a channel is the best market for this strategy. In a trending market, we have lots of S&R breaks and this means here these levels can’t keep the price down or up, honestly.
You can find trading opportunities with simple fibonacci levels. In my opinion, the most important fibonacci levels are 161.8, 127, 61.8 and 78.6. In these levels, many times, we have bounces of the price. A lot of harmonic patterns are created by these levels, also.
Now, look at this chart! We have leg 1-2, here is a down movement of the market. Then, we have leg 2-3, an up movement of the market. As this chart, many times, the price makes bounces in levels 161.8 and 127. You can know that these are good physical levels for S&R. Combining them with an Overbought area for puts and an oversold area for calls (with RSI or a value chart) or with previous S&R in these fibonacci levels and you have a high probability setup.
How can you draw fibonacci? Simply, drag the fibo drawing tool which is from spot 1 to spot 2 and just wait for the price to hit these levels (notice that spot 3 in this chart).
In simplicity, this is a solid strategy and gives you the opportunity for trading with the trend. It’s no need that you have to identify when a trend starts. Well, you have to wait for a trend and try to find the right time to jump in. For doing this, you can use EMAs.
Look’s at this chart! As you can see, it’s from EURUSD currency pair with a 5 minutes timeframe. We have a good up trend in the blue rectangle. The up trend is powerful. Your duty is just to wait for the price to hit the EMAs, generally. In this chart, I utilize two EMAs including a 13 period (present as the green one) and a 26 period (present as the red one). In this case, the price makes a down movement in an uptrend and the EMAs can offer you a spots where the price will stop the down movement and it will continue with the general up trend. You should notice about the call arrow in the chart. We see the price is moving down and as it hits the red EMA (26 period) we get a bounce and then the price is moving with the general up trend. With this strategy, it allows you to have the ability of using Tenkan and Kijun of Ichomoku Kinko Hyo.
You can wait for EMAs crossovers and trade in the starting of a new in this strategy. So, how can you do this? Just by using two EMAs. For me, I use 13,26 period EMAs for 5 minutes and 15 minutes timeframes. You can find in your metatrader platform Heiken Ashi indicator and then just drop it to your chart. But, why Heiken Ashi? The reason is they can decrease the noise of the price. As you can see that in this case we want a trader with a longer expiration, for example, 15- 30 minutes because it maybe that the price will move sideways in the starting. Well, look at this chart!
As you know that I utilize the EMAs I mentioned above and I wait for crossovers. And, we have crossovers in the two blue rectangles. In this chart, I use Heiken Ashi bars. When seeing a crossover and the Heiken Ashi bar has the right color (I means red for puts and white for calls), I take trades with 15-30 minutes expiration. You should know that you can take a put on the first crossover and in the second crossover you can take a call. Check Out 100k Factory