Signal trading strategy, Trial and Error – The Biggest Mistake

If you learn only one thing from this site it should be this; look for obvious price action patterns from signal trading strategy horizontal levels in the market.

  • A trade signal is a trigger for action, either to buy or sell a security or other asset, generated by analysis.
  • Updated August 05, Julie Bang The Balance To find the best technical indicators for your particular day-trading approachtest out a bunch of them singularly and then in combination.
  • The Simplest Trading Strategy in the World |

What matters is if the two have come together to form a confluent price action trade. When you have an obvious price action signal, like a pin bar or a fakey signal, and that signal has formed at a key horizontal level of support or resistance in a market, you have a potentially very high-probability trade on your hands.

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Key horizontal levels of support or resistance are areas or levels on the chart that price made a strong move either up or down from. They can be used in any market condition; trending, counter-trend or trading ranges. The important thing we signal trading strategy focusing on in this lesson is finding a clear price action signal at a key chart level.

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Clearly, the Then, all you needed to do was sit and wait for a signal to form at or near that level. We can see a very nice pin bar buy signal did form at that level, showing a rejection of it that indicated price might push higher in the coming days.

The next example is of a pin bar buy signal that formed at a key chart level of support in an up-trending market. When you get a price action signal that has confluence with a trend and a level, that is a good-quality trade setup.

Using Technical Indicators to Develop Trading Strategies

We had an uptrend, a key horizontal support level near 1. You can see the trend resumed the very next day after that pin bar as price continued pushing higher. In the chart below, the NZDUSD was trading in a large range, back and forth between horizontal support and resistance levels.

  1. Opinions are produced as a result of the Trading Signals given for each of the 13 indicators.
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In these situations, where a market is range-bound, we can look to the boundaries of the range support and resistance levels for potential price action buying or selling opportunities. This is the EURUSD daily chart and we can see a very obvious fakey trading strategy formed at a key resistance level near 1.

Selecting The Right Trading Signals

This fakey signal showed a rejection and false breakout of that level, indicating that the bulls were exhausted and that price may fall lower in the coming days.

We can see that price did fall from that fakey signal and it fell significantly lower in the ensuing days.

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Another clear example of the power of trading price action signals at key horizontal levels in the market. All you need is the ability to recognize price action trading strategies at key chart levels of horizontal support and resistance.

To learn more, visit the price action trading university.

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