Good Day traders,
In this article I am going to say and explain some useful and simple strategies for newbies.If you do your research out there you will find so many strategies which promise fast and sure profit. Their creators describe them as the “holy grail” and many times it needs to subscribe to take a strategy with its indicators without knowing if this strategy really works.Many of them don’t work or they work for short term periods and they don’t have added value in the long term run.From my experience,you can find all these paid strategies for free and finally there isn’t something special about them.Now, I am going to explain you some solid and simple strategies which are based in logic and in reality.
– Support and Resistance for puts and calls
The most popular strategy especially for the new traders is “Support and resistance”. You should identify the right spot and you can take call trades in a support area and put trades in a resistance area. How can you identify these areas? There are several ways.One of them is to notice how the price acts in older areas and trying to predict the price movement when the price comes back to these areas.This is the whole value of technical analysis.Predict the future by studying the price behaviour in the past.
In the chart above you can see trading opportunities, puts in the previous resistance and calls in the previous support when the price comes back to test again this area. The best market for this strategy is a ranging market in which S&R keep the price into a channel.In a trending market we have many S&R breaks and this means that here these levels can’t keep the price down or up.
– Fibonacci Bounces
With simple fibonacci levels you can find trading opportunities.The most important fibonacci levels for me is 161.8 , 127 , 61.8 and 78.6. Many times in these levels we have bounces of the price. Also, many harmonic patterns are created by these levels.
Look at this chart. We have leg 1-2 , a down movement of the market.After that we have leg 2-3 an up movement of the market.Many times like this chart, the price makes bounces in levels 161.8 and 127. These are good physical levels for S&R.You can combine 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 a high probability setup.
How to draw fibonacci?Drag the fibo drawing tool from spot 1 to spot 2 and wait for the price to hit these levels.(spot 3 in this chart)
-Bounces in a trend
This is a simple solid strategy and give you the opportunity to trade with the trend.You don’t have to identify when a trend begins. You have to wait for a trend and find the right time to jump in.For this you can use EMAs.
Look at this chart. It’s from EURUSD currency pair with a 5 minutes timeframe.In the blue rectangle we have a good up trend.The up trend is strong.All that you have to do is to wait for the price to hit the EMAs.In the chart I use two EMAs. A 13 period (the green one) and a 26 period (the red one).The price makes a down movement in an uptrend and the EMAs can give you a spots in which the price will stop the down movement and it will continue with the general up trend. Notice the call arrow in the chart.The price is moving down and when it hits the red EMA(26 period) we have a bounce and after that the price is moving with the general up trend.For this strategy you can also use Tenkan and Kijun of Ichomoku Kinko Hyo.
-EMAs crossovers with Heiken Ashi
In this strategy you can wait for EMAs crossovers and trade in the beginning of a new trend.How to do this? Use two EMAs. I use 13,26 period EMAs for 5 minutes and 15 minutes timeframes.Find in your metatrader platform Heiken Ashi indicator and drop it to your chart.Why Heiken Ashi?Because they can reduce the noise of the price.In this case we want a trader with a longer expiry like 15- 30 minutes because the price maybe will move sideways in the beginning.Look at this chart.
As you can see I use the EMAs I said above and I wait for crossovers.In the two blue rectangles we have crossovers.I use Heiken Ashi bars in this chart.When I see a crossover and the Heiken Ashi bar has the right color (red for puts , white for calls) I take trades with 15-30 minutes expiry.On the first crossover you can take a put and in the second crossover you can take a call.