Easy Forex Trading Strategy For Beginners | Day Trading System For CFDs and ETFs


Hey guys, so let me ask you something: how
many of you are trading with the previous day high and lows added on your charts? My guess is that only a small minority of
you are paying attention to these levels. If you add the high and low of the previous
day on your charts you can see that the market is often reacting to these resistance and
support levels. These two lines, the previous day high and
low represent one of the most important levels for today’s price action. In this video I’m going to show you an easy
intraday trading strategy that will help you enter the market around areas of strong support
or resistance, with narrow stop losses and excellent profit targets. This strategy is mainly based on finding confluence
around previous day’s highs or lows. The previous day’s highs and lows are one
of the most common and reliable support/resistance levels. They work because they’re visible without
traders having to use any particular indicator. They’re obvious to everyone looking at a
price chart. These levels work because the masses of people
trading the market respond to them on a daily basis. The beauty of these levels is the fact that
you can use them both in trending and ranging markets. In an uptrend, you will often see than the
previous day high, will serve as a strong support for the current day, as you can see
on this apple chart. In a downtrend, the previous day low will
often serve a reliable resistance area for the current day, like in this Exxon Mobile
chart. During a ranging market, you will often see
the price reacting to both levels. Paying attention to these levels will allow
us 2 things. We can easily identify potential breakout
areas but we can also take trades when the market is not moving in a clear defined trend. I prefer to increase my chances of entering
in high probability areas, so i always look for confluence on my charts. That’s why, I add the Bollinger bands for
this setup. I often use the Bollinger bands with a 50
period moving average and a 3 standard deviation because almost 99% of the price action is
contained within the standard deviation of 3 of the Bollinger bands. I prefer to trade with the odds in my favor,
and if a standard deviation of 3.0 will offer me around 99% certainty that the price won’t
exit the Bollinger bands, then I will be interested to trade only with this setup. Bollinger bands serve as a pretty accurate
dynamic support/resistance indicator, and the price barely exceeded the bands. In a ranging market, I want to see the bands
narrow and parallel. From my experience, this pattern is quite
reliable when there is no clear trend on the market. The price will often touch the lower and the
upper Bollinger bands, and the middle band will also serve as support and resistance. In a trending market, the price will often
stay between the middle line and the upper or the lower Bollinger band. In this example, we have a clear downtrend
and the price stood most of the time between the middle line and the lower Bollinger band. So, how do we combine the previous day high
and low with the Bollinger band. Very simple, we search for confluence areas
between them and we trade when the price action is near, or ideally touches the confluence
area. The most reliable signals appear when the
market is in a range. Here is the area of confluence between the
previous day low and the Bollinger band. The price was trading in a range, in a weak
uptrend, if we took into account the higher highs and the lower lows. The signal appeared when the price touched
the previous low and the lower Bollinger band. In addition, we have the previous resistance,
became support after the breakout, so we had 3 major forces around that area. This was a high probability buy signal, with
a stop loss below the confluence area. Regarding the take profit zones, there are
a couple of alternatives. You could aim for a 2:1 risk reward ratio,
or you can target the upper Bollinger band. The third choice would be a breakeven stop
once in profit for a risk free trade. If you chose the third option with a breakeven
stop, be prepared to be stopped out often from your trade, but once you will catch a
good trend, this will make up for all your breakeven trades and more. Here’s a short trade. In this chart we have a clear range, with
no trend whatsoever. And here is the confluence area between the
previous high and the upper Bollinger band. Once the price touched the confluence area,
the sellers immediately gained control of the market and pushed the prices down. There are 2 types of entries here: an aggressive
entry when the price touches the Bollinger band and the previous high (which is what
I prefer), or a conservative entry after you get some sort of confirmation of rejection
from that area. In this case, you wait until the red candle
rejected the confluence zone. Let’s take another example and by now i
hope you comprehended how the signals work here’s a quick exercise: can you determine
the best entry on this chart? You have 5 seconds. Here it is, the low of the previous day, the
lower Bollinger band, and the clear rejection of that area. The wick of the rejection candle confirmed
that buyers entered the market, and pushed the price to the upper side of the Bollinger
bands. The same setup on another chart. We have a range within a weak uptrend, after
higher highs and equal lows. The price touched twice the previous day low,
forming wicks on the rejection candles. The price took off and reached the previous
day high and the upper Bollinger band. Now, there is another type of signal, which
is riskier, in my opinion, and it appears when the market is trending. If in the previous examples we were taking
signals inside the range of the previous high and low, between the 2 extremes of the previous
day, this time we search for entries when we have a breakout of one of these levels. So, in this example we have a clear downtrend,
the price recording lower lows and lower highs. Here, the price broke the previous day low,
so the alternative of trading inside the range was gone. Once the price returned to the breakout level,
at the low of the previous day, we had an opportunity to short the market, because the
middle Bollinger band acted as a dynamic area of resistance. As you can see the price formed another downward
swing before it finally reversed. Let’s take another example. Here is a perfect buy, right to the pip. We have a clear upward trend, with higher
highs and higher lows, the price broke the previous high of the day and retraced to the
breakout level. The middle Bollinger band offered support
and the price immediately rejected that confluence area, also confirmed by the reversal candlestick
which formed right after the buyers entered the market. If we look back in the chart, we can spot
another buy entry, this time not as obvious as the previous one. The price broke the previous high, and consolidated
there, before it finally took off recording new highs. And here is a short trade. We have a clear downward trend, with lower
lows and lower high and the price broke the previous low of the day and retraced to the
breakout level. The middle Bollinger band offered resistance
and the price continued its downward direction after testing the confluence area. As you can observe from these examples, the
highs and lows of the previous day are without doubt one of the most important levels you
must have on your charts. If a market cannot go any lower, it means
that some sort of buying pressure must have come in at those levels to support the market. This is why you have to know about these levels
– not after the event, but before, and in good time to be able to monitor the situation
and react according to the price action you see unfolding in front of you. Now, if you learned something new or found
value, please consider subscribing to our channel, share and like this video, as it
would help us a lot in the future. Until next time.

26 thoughts on “Easy Forex Trading Strategy For Beginners | Day Trading System For CFDs and ETFs

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  2. Thanks to Mr Scott anderson for the great analysis, in trading and the good offer he has given me in trading also absconding me from scammers.

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  4. Nice. I want to use this but how do I get the previous day high/low to show on my chart?

  5. Thanks for this video. Please what recommended time frame for this system.

  6. Hi nice video… can you give download link of this high low indicator for mt4

  7. This indicator show last day high and low. So if I don't find this indicator then I can draw previous day high and low manually right?

  8. Sir please make more videos on intraday trading with different indicators.

  9. what is your best strategy for scalping or day trading gold that is so volatile

  10. great video! what is the name of the indicator with blue lines that shows previous highs and lows? thx and keep up!

  11. This is a " GREAT STRATEGY " i have been using this for my tradeing for the past three and half weeks now and my Profits have been " WAY UP ' thanks alot man 🙂

  12. Sir, I can not find "Previous Period Levels indicator" on my platform. Please tell me other common similar indicators. I thank you in advance !

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