The Simplest Trading Strategy in the World – PriceAction.com (2024)

One of the simplest and most effective trading strategies in the world, is simply trading price action signals from horizontal levels on a price chart. If you learn only one thing from this site it should be this; look for obvious price action patterns from key horizontal levels in the market. If you just stick to that ‘formula’ you will have plenty of high-probability trading opportunities over the course of one year. Don’t over-complicate the process of analysing the markets / charts and finding trades. The market will generate signals for you when it’s ready, all you need to do is learn what the signals look like and where to look for them at. This is what you will learn in this lesson…

Price action signals + Horizontal levels = Success

It doesn’t really matter which component you find first, the price action signal or the level. 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.

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 are focusing on in this lesson is finding a clear price action signal at a key chart level. These levels tend to act like ‘magnets’, attracting price to them before price pushes away again. They can also be thought of as ‘value areas’, or areas on the chart where price found ‘fair value’ which typically happens before a strong move occurs again.

Let’s take a look at some examples of trading price action signals from key chart levels:

The chart below is a daily Gold chart and it shows us a nice clear example of a well-formed pin bar pattern that formed at a key horizontal level in the market. Clearly, the 1170.00 was already an important horizontal level that you should have had marked on your chart before this pin bar formed. 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..

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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. You won’t find a much better example than the one below that formed on the daily GBPUSD chart. We had an uptrend, a key horizontal support level near 1.6655 and then a very well-defined / ‘perfect’ pin bar trading strategy formed at that level. You can see the trend resumed the very next day after that pin bar as price continued pushing higher.

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In the chart below, the NZDUSD was trading in a large range, back and forth between horizontal support and resistance levels. 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. We can see a fine example of this in the chart below when an obvious pin bar sell signal formed from the horizontal resistance of this trading range, setting off a huge move lower, to the bottom of the range…

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Finally, let’s look at a counter-trend example of trading price action signals at key chart horizontal levels in the market. This is the EURUSD daily chart and we can see a very obvious fakey trading strategy formed at a key resistance level near 1.3950. 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. Another clear example of the power of trading price action signals at key horizontal levels in the market.

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Conclusion

The main point of this lesson is simply this: You DO NOT NEED a complicated or confusing trading strategy to find high-probability entries in a market. All you need is the ability to recognize price action trading strategies at key chart levels of horizontal support and resistance. If you just focus on this one strategy and really ‘master’ it, you will be able to look at any chart of any market and find high-probability price action trading opportunities.

I hope you’ve enjoyed this lesson on the simplest trading strategy in the world. To learn more, visit the price action trading university.

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AboutNial Fuller

Nial Fuller is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught over 25,000+ students since 2008. Checkout Nial’s Price Action Trading Course here.

The Simplest Trading Strategy in the World – PriceAction.com (2024)

FAQs

What is the simplest trading strategy ever? ›

One of the simplest and most effective trading strategies in the world, is simply trading price action signals from horizontal levels on a price chart.

What is the most simple price action strategy? ›

The head and shoulders reversal trade is one of the most popular price action trading strategies as it's relatively easy to choose an entry point (generally right after the first shoulder) and to set a stop loss (after the second shoulder) to take advantage of a temporary peak (the head).

Is price action enough for trading? ›

Price action trading is better suited for short- to medium-term, limited-profit trades instead of long-term investments. Most traders believe that the market follows a random pattern and that there is no clear, systematic way to define a strategy that will always work.

Is there a 100% trading strategy? ›

A 100 percent trading strategy is an approach that involves investing all of your capital into a single trade. While this can be risky, it can also lead to significant profits if executed correctly.

What is No 1 rule of trading? ›

Rule 1: Always Use a Trading Plan

You need a trading plan because it can assist you with making coherent trading decisions and define the boundaries of your optimal trade. A decent trading plan will assist you with avoiding making passionate decisions without giving it much thought.

What is the easiest pattern to trade? ›

What are the best day trading patterns for beginners? The easiest to learn patterns are the falling wedge, rising wedge, bull flag breakout, and cup and handles. The cool thing about trading patterns is that they happen repeatedly, and you can fall in love with or even marry them.

What is the most profitable trading strategy? ›

Risk Management: The Cornerstone of Profitable Trading

Risk management involves setting clear rules for how much capital you're willing to risk on each trade and using tools like stop-loss orders to limit potential losses. It's crucial to never expose yourself to more risk than you can afford to lose.

What is the easiest form of trading? ›

Which type of trading is best for beginners? Beginners should consider starting off with swing trading, which means holding an investment for more than one day and less than a couple of months. It's less time-consuming and stressful than day trading. Stocks are particularly good for beginners to test the waters.

What is the best indicator for price action trading? ›

The most commonly used price action indicator is the study of price bars or candlesticks which give details such as the open and closing price of a market and its high and low price levels during a specific time period. Analysing this information is the core of price action trading.

What is the trick for trading? ›

You must keep emotions under control and define your profit goals. If the stock has reached that level, book profits and exit. Choose the right trading platform: One of many prudent intraday trading tricks involves choosing the right trading platform with all the tools you need to make the right decisions.

Is there a trading system that can win 100% of the trades? ›

There is no such thing as a trading plan that wins 100% of the time. After all, losses are a part of the game. But losses can be psychologically traumatizing, so a trader who has two or three losing trades in a row might decide to skip the next trade.

What is the secret to trading? ›

By developing a trading plan, focusing on risk management and position sizing, keeping a trading journal, using technical analysis, having realistic expectations, and staying disciplined, you can increase your chances of success. Remember that trading is a journey, and success takes time and effort.

Which trading strategy is most successful? ›

The most popular trading strategies are:
  • Trading strategy based on technical analysis and price patterns.
  • Trading strategy based on Fibonacci retracements.
  • Candlestick trading strategy.
  • Trend trading strategy.
  • Flat trading strategy.
  • Scalping.
  • Trading strategy based on the fundamental analysis.
Jan 19, 2024

What is the easiest trade to do? ›

Carpentry is one of the easiest trades to learn. It involves constructing and repairing structures made from wood, such as houses, furniture, and other wooden objects. Carpenters typically use hand tools like saws, hammers, chisels, planes and drills to create their projects.

What is the 1% trading strategy? ›

The 1% method of trading is a very popular way to protect your investment against major losses. It is a method of trading where the trader never risks more than 1% of his investment capital. The main motive behind this rule is in terms of protection – you are not risking anything other than what is available.

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