The Best Forex Daytrading Strategies IV

Reversal Symmetrical Triangle Strategy

In this article we finish the series on daytrading and scalping strategies based exclusively on price action applicable to Forex and other markets, we hope you have liked it.

These strategies are based on the identification of classic price patterns from technical analysis.

You can access the third article in the series at the following link: The Best Forex Daytrading Strategies III

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The Best Forex Daytrading Strategies III

Head and Shoulders strategy

In this article we will continue with the series of articles on scalping and daytrading strategies based exclusively on Price Action that may be useful for you to trade in Forex, although they can also be adapted to other markets.

These strategies are based on the identification of classic price patterns from technical analysis.

You can access the second article in the series at the following link: The Best Forex Daytrading Strategies II

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The Best Forex Daytrading Strategies II

In a previous article we explained some basic day trading strategies for Forex and other markets, mainly based on price action.

Continuing with the series on daytrading strategies based exclusively on Price Action (the most common price patterns), we are now going to present another series of strategies based on classic price patterns of technical analysis.

You can access the first article in the series at the following link: The Best Forex Daytrading Strategies I

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Evening Star Candlestick Pattern

The Evening Star candlestick pattern is a highly reliable trend change formation that occurs in bull markets and indicates that there is a high probability that the price will change from a bullish to a bearish trend. This pattern can be identified in the following way:

  • The previous trend must necessarily be bearish.
  • A large white candlestick is followed by a candlestick (white or black) with a small body that opens and closes above the body of the large white candle. 
  • In the following period, a black candlestick is formed and its opening price is formed below the minimum price of the body of the previous candlestick while the closing price occurs inside the body of the great white candle that started the formation.

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The Best Forex Daytrading Strategies

In this article, we present a complete collection of ideas to build daytrading strategies based exclusively on price action that can be useful to trade in Forex, although they can also be adapted to other markets. By the way, I have been told that these strategies were used on a trading desk of a well-known US investment bank. Although logically I have not been able to corroborate this, the truth is that these trading ideas are at the least original since they combine different patterns in an unusual way. Having said that, we will now study these strategies in detail.

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Bull Trap and Bear Trap – Traps in the markets

In this article, we are going to explain the most common traps in the markets, known as bull trap and bear trap, how we can avoid them and, above all, how we can take advantage of these market conditions. Pay attention, because this article is going to take you from the losers side and put you on the side of the smart traders.

The traps can be bullish or bearish. The traps for buyers are called bull traps and the traps for sellers are called bear traps. Generically, we sometimes refer to a trap as a swing trap.

First of all, we will look at how a market trap is formed. After all, it is simply a thing that is not what it seems to be. The price goes in one direction and we, as rebound hunters, wait for the right moment to open a new position in the opposite direction. However, it is a trap! Now that we are inside, the price continues with its previous movement, destroying our idea of making money.

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Trading Using the Simple but Effective Rule of 2 Candles

This trading technique that can be found for free on forums and websites like this has the advantage of requiring no more than a few minutes a day so it is perfect for traders with many occupations and with no time to see charts and analyze the market all day. Furthermore, the procedure of The rule of the two candles is not complicated and can be learned very quickly.

Basically, this strategy is based in the identification of an “Inside Bar” as shown in the following image:

Inside Bar Trading System

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