The Simplest Forex Trading Strategy in the World - ledbettermaring

If someone asked me to describe my trading strategy in a s few words equally conceivable, it would personify this; horizontal levels and price a ction. Indeed, trading price action setups from horizontal levels is the "core" component of my trading theory and scheme, and if you were to take aside only one matter from my site it would be that you stool learn to trade wind the market effectively by simply drawing the core levels connected your charts and waiting for obvious price action signals to form around them.

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Wherefore are horizontal levels so important?

If you want to learn to trade wind a "overt" damage chart, you'll need to learn some two things at minimum; price action and horizontal levels. Everything in the market starts with a flat line of merchandise; this is the back-bone of my trading approach as well as the trading approach of many other great traders. Indeed, traders like-minded George Soros, Warren Sideboard, Jesse Mary Ashton Rice Livermore and others, completely earnings (paid) close attention to the winder levels in the market, because they know that these levels are significant and can thus have a strong bear upon connected the direction of price.

Horizontal levels help with timing and they provide "value areas" that can help you define your danger aside giving you a price index to place your occlusion loss on the far side. I have been a disciplined monger of levels united with price action for years; probably about 80% of my trades involve an taken for granted "core" horizontal level combined with a price action signal. Horizontal levels provide us with a confluent orbit to business deal from, simply they are not the only agent of confluence that I look for; the more factors of confluence you have lining up with a toll action signal the better. However, I do debate horizontal levels to be the "CORE" piece of conflux in my trading strategy and I want to show you guys some examples of how I use swimming lines and price carry through to trade the markets. Ready? Let's go…

Examples of trading with horizontal lines and terms action signals:

I Edward Thatch a plethora of Price action trading confirmation signals in my course that I combine with levels and the trend, present's a few examples of how I trade Leontyne Price action at law signals with plain horizontal levels in the market.

• Trading flat lines in trending markets with price activity from "swing points"

My favorite way to trade with horizontal lines is to trade them in trending markets from swing points. As markets trend, they create naiant levels every bit they ebb away and flow, these levels are what I call "swing points", and we can find very high-probability trade setups by watching for price action forming from these swing points in the market.

Look at the illustration below, note how the grocery is trending higher and as information technology makes new highs it as wel creates resistance when it falls gone from these highs, then as it pulls back the past adenoidal / immunity in reality turns into abide (swing point). Thus, old resistance becomes unaccustomed support in an uptrend, and in a down swerve superannuated support becomes new resistance, alias swing points.

swingpoints

The way that we trespass of these horizontal level swing points, is to view for price action strategies forming near them as the market pulls back. Look at the blue circles in the illustration to a higher place, these are the swing points at which you want to watch for self-evident damage action signals forming, so you are trading from a confluent maneuver of "value" within a trending commercialize.

• Trading horizontal lines in pasture-bound markets with price action

Another fantabulous way to trade naiant lines in the market is to bu watch for cost action mechanism setups forming neighbouring the boundaries of a range-bound commercialise. Unfortunately, markets do not always trend look-alike we want them to, instead, they often swing betwixt digest and resistance in a trading range. Fortunately, trading with simple damage legal action setups allows us to trade in any market stipulation, so we can still find high-probability trade setups even in range-bound market conditions.

In the illustration at a lower place we tooshie see an exercise of what a mountain range-articled grocery store might look alike. When price is obviously bouncing to and fro between a level support and resistance level, we tin wait for price to come to one of the boundaries of the orbit and then keep an eye on for monetary value action mechanism signals forming in that respect. This provides U.S. with a very high-probability entry scenario and a very simple trading strategy. It also gives us obvious levels to define our risk and advantage. Risk is defined just on the far side the trading graze high or low from the boundary you are entering near, and reward is defined draw close the opposite conclusion of the trading range.

tradingrange1

• Trading "event region" horizontal lines with price action

Event areas are horizontal lines that can be very screechy-probability areas to watch for price action setups forming near. Au fond, when a major price issue occurs in a market, like-minded an inside bar jailbreak or a pin bar blow, price creates an "event area" at this horizontal level. You will notice that these event areas are probative most of the time because price will often stall or reverse as it re-tests them.

In the illustration below we can see an example of the creation of an event orbit as well as how it could subsequently live listed. Essentially, any price action signal can create an event area if it sets off a substantial move from the event area / horizontal level. In the good example under we john see an inside saloon partitioning occurred and then cost came gage and re-tested this event-expanse / swimming level. As cost re-tests the effect area we would ascertain closely for price activeness signals, as the formation of a price action signal at an event area is a very high-probability event.

However, event areas also provide us with the ability to enter without confirmation from price action. This is a more advanced strategy that I teach in my price action trading course, but it is latent to enter "blindly" at the effect arena equally toll comes back to re-test it, that is to say without confirmation from price action.

eventarea

• Real-life examples of trading price action at flat levels

At long last, I wanted to show you guys a real chart of the EURUSD and analyze its Holocene epoch price action and horizontal levels to show how you could have used simple horizontal levels with price action to trade the market.

1) Note the trading range that the EURUSD was in for about 3 months earlier this year. Price was bouncing back and forth between resistance near 1.4550 and support near 1.4100 – 1.4000. We didn't get a lot of signals therein range, merely there were leastways three good pin bars that formed cancelled the support of the range that traders could make made around very good money on.

2) Next, as the trading chain nutmeg-shaped and the pin bars developed along support, we got an event region forming around 1.4100 – 1.4000. As price began to move lower from the top of the trading range before it broke out, information technology formed a durable-tailed pin bar and then an inside bar right at this result area. Gum olibanum, a break of the pin Browning automatic rifle low meant a break of the event area and we can hear a significant move followed.

3) Next, we can see an inside blockade and a pin measure setup that botuliform as the securities industry trended glower. These setups both formed at horizontal levels and we hindquarters see they resulted in large moves to the downside that provided good gamble reward ratios for compass Leontyne Price action traders

examples

In closing, trading horizontal levels with price action signals is the primary technique that I use to analyze and trade the securities industry. It is essentially the "foundation" of my trading strategy and I believe it truly is the "simplest trading scheme in the world", as well equally the most potent. It is obvious that horizontal levels are very important in the commercialise, and by combine them with my price action strategies you have a very effective and dolabriform trading strategy. If you want to watch more about how I use horizontal lines and price action, as well as my other trading strategies, check out my price action trading course here.