Some of the best Forex strategies you can use are often the most simple.
These simple Forex strategies include price action, candlestick patterns, and popular indicators.
This post goes through some of the simplest Forex strategies you can start using in your trading.
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What is a Simple Forex Strategy
A simple Forex strategy is a strategy that has simple and straightforward rules for how you enter and manage your trades. This includes where to put your take profit and stop-loss levels.
Profitable trading strategies do not need to be overly complicated, and often the best strategies are the ones that give you clear trading rules.
Below we go through some of the simplest Forex strategies and how you can use them in your trading.
The Simplest Forex Strategies
Support and Resistance Trading
Support and resistance trading is one of the simplest forms of trading you can do.
When using support and resistance to find trades, we are looking at areas where the price is looking to reverse.
For example, if using the support, we are looking for a bounce and move higher from the support level. We are looking for a bounce and reversal back lower if using resistance.
Support and resistance works because we are looking to trade from areas price have previously found support or resistance and reversed.
The example below shows how you could use support and resistance in your trading.
First, we have a proven resistance level where the price has previously found resistance and moved back lower.
We then have a proven support level where the price has bounced and moved back higher.
When using these levels, we could be looking to make short trades when the price moves into resistance and long trades when the price moves into the support level.
Candlestick Pattern Trading
Candlestick pattern trading can be as simple or as advanced as you like.
The good thing about candlestick pattern trading is that you can use it in most markets and all time frames to make your trades.
There are a lot of candlestick patterns you can learn and use in your trading, ranging from multiple candlestick patterns to the simple one candlestick patterns.
In the example below, we have a bullish engulfing pattern. This pattern is formed when the current candlestick fully engulfs the previous candlestick and closes higher.
This pattern shows us that the buyers have taken control, and a new move higher could soon be on the cards, like in the example below.
Price Action Trading
Very similar to candlestick pattern trading is price action trading.
Just like candlestick patterns, you can make price action trading as advanced or as simple as you like.
There are hundreds of different price action trading strategies, but often the best are the simplest.
The other good thing about price action trading is that you can use it in any market or time frame that you like to trade.
The other bonus is that you can combine it with popular indicators such as moving averages or the MACD to find even higher probability trades.
In the example price action strategy below, we use a down trendline to look for short bearish trades.
Trendlines work very similarly to support and resistance levels, with the main difference being that price usually is in a trend higher or lower.
In the example below price is in a trend lower, and we are looking for short trades.
As the price moves higher and into the resistance of the down trendline, we can start to look for short trades and for the price to move away from the trendline again.
You can learn and start using some of these very simple Forex trading strategies in your trading very quickly.
The other great thing about these strategies is that you can make them as simple or as complicated as you like.
The best way to use these strategies will often be by combining them with other strategies or popular indicators.
For example, you could use your candlestick pattern or price action strategies with popular indicators.
You could use these indicators to find possible trends or when the market is looking for reverse and then refine your entries with price action, support/resistance, or candlestick patterns.