Simple and Effective Forex Trading Strategies

The combination of a horizontal line at the level of support or resistance and price action may be the one simple and effective forex strategies that you can apply. (Note: Price action is a way of trading to observe and analyze the formation of pin bar that happens to Candlestick chart). After we defined horizontal lines of support and resistance for the dominant, we can wait for the formation of pin bar that formed around those levels.

The importance of horizontal lines

Maybe we feel uncomfortable with many trading indicators on the chart, and want it could be trading with a few indicators but quite validly. Well, if that's what we want, maybe you can try this way, the horizontal lines and the price action. Professional traders always look at important levels on the horizontal line. They have to know that these levels are very significant and have an impact on the direction of price movement. Horizontal lines can be used as a reference for setting the level of stop loss, and will be effective when combined with price action with examining the pin bar formed.

Application of horizontal lines and the price action in trending market conditions:

Consider the following example, on each swing point we can observe the formation of the pin bar formed. In fact, the swing point is often accompanied by the formation of pin bars that indicate a reversal of the trend going. In the case of an uptrend as in this example, the pin bar on the swing point (blue circle) indicates the downtrend reversal correction, or commonly known as the end of the correction, so that the overall trend is still rising. In a downtrend market that is happening is the opposite process.

The application of horizontal lines and the price action in the sideway market conditions (range bound):

For sideway market conditions (range bound), we simply look at the formation of the pin bar formed on support levels and resistance (blue circles in the figure below). We determine the timing for the start of entry if it has really looked signal pins that ensure that the bar is still sideway market conditions, and are still in a trading range. Stop loss and profit targets can be set at a level close to the support or resistance in accordance with the direction of entry positions we take.

'Event' area in a horizontal line

Event area is the area around a horizontal line which shows strong signals for entry based on price action. Of formation of pin bar formed can happen penetration (break) or retest at a certain price level which indicates that the level is significant. For entry should be confirmed with a pin bar formed.
In the following example that has break inside bar indicates a strong signal to sell, after retest confirming that the horizontal line is really significant resistance (blue circle in the image), we can sell at the entry level slightly below the retest point.

Examples of trading with horizontal lines and the price action

In the following example EUR / USD initially sideway at 1.4100-1.4000 level (event area), then break down when it formed a pin bar and inside bar. After the retest, the price moves back down. Note the pin bar and inside bar formed and indicates the levels where we can entry.

So by combining the levels of support / resistance and pin bar that formed in the surrounding area we can find signals when the right time to enter the market.