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What are some basic Forex trading strategies?


The most basic forex strategies usually rely on price levels. However, the beauty of the most basic and simple trading strategies is that if you spend enough time developing them. They become more and more sophisticated and complex.

It relates not only to trading strategies per se; basically, it’s the definition of craftsmanship.

Let’s bring some meat to the bones, shall we?

Take, for example, the most fundamental trading strategy from the Olymp Trade Blog that can be applied to various trading modes. It is so based that I almost feel ashamed to bring it up.

But, as I said, even this simple strategy has levels of complexity to it.

The Support/Resistance levels strategy level one assumes that we should:

a) define the strong price levels where price stumbled several times, fluctuating back and forth, trying to break them through;

b) open manual or pending orders from those price levels;

That’s pretty much the Support/Resistance strategy 101.

Now, let’s add one more level by implementing some of the most basic indicators you can find on any trading platform.

The one that is mentioned in the article is Exponential Moving Average. I have nothing against this indicator, but I’d like to add something more sophisticated than that - Fibonacci Retracement Levels.

You see that the strong resistance level is aligned with the strongest 0.618 or 61.8% level of Fibonacci Retracement Levels. Therefore, the chance price will bounce from this level is pretty high. In this case, we can confidently place our pending short order on that level.

Or let’s say it’s not enough for you, and you want to get more data from the chart to be even more convinced of the accuracy of your decision. Then we can add one more indicator to the chart, RSI, for instance, and wait for the price to surpass the overbought line.

Then manually open the order, with a stop-loss, of course.

My point is that you can take any strategy and improve it by applying different tools and trading various assets. And over time, it will become a powerful tool handcrafted by you and for you.

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