One of the most fundamental Forex Trading Strategies that every trader should be familiar of is the Forex Signal that pertains to Price Action. In relation to this, I would like to share the three common price action Forex trading strategies that would give you an edge as a Forex trader. These are the Pin Bar, Inside Bar and Fakey, likely to called, Mr. Inside, Ms. Pin and Doctor Fakey for easier retention. These three trading patterns are quite simple to understand yet very powerful, with discipline and determination combined. Therefore, it should not be taken for granted because it is a very potent tool for successful Forex trading.
Read more about Forex Trading Strategy Made Very Simple – Price Action
Forex Trading Strategy: Pin Bar Setup
Pin Bars typically have a very high accuracy rate in trending markets, especially when they occur at significant confluence levels such as support and resistance levels. Pins may be taken against the trend if they are well defined and if they significantly exceed surrounding price bars. See example below, to see how the pin bar appears in a bullish trendline from a bearish trendline.
Forex Trading Strategy: Fakey Setup
The Fakey trading setup indicates rejection of an important level within the market, and it can offer some overwhelming moves in the market. Oftentimes, the market will appear to move in one direction and then a reversal motion happens, and the price will go back in the opposite direction. In the example below, it consists of an inside bar then followed by a false break of the inside bar and then a close back within its range.
It is seen that in the example below, the market is moving higher before the Fakey forms. The Fakey is formed on the false break of an inside bar setup that occurred as all the amateurs tried to pick the market top, then the pros stepped in and interrupted the amateurs through a series of buying.
Forex Trading Strategy: Inside Bar Setup
The Inside Bars are a very common pattern on the chart. It is a great trend continuation signal, but can also be as a turning point signal. In here, I will discuss about the inside bar that acts as a continuation signal. In the example below, the inside bar is completely contained within the range of the previous bar. It shows a brief consolidation and then it breaks out in the dominant trend direction. With inside bars best being played on daily and weekly charts, it also allows for very small risks and yet offers large rewards. Furthermore, the inside bar setup in the example, comes off to the downside with the existing bearish market momentum. After the market breaks down below a key support level, a good inside bar is formed.
Bottom line is that most charts conveys a very complicated and intricate lines yet when these basic patterns will be understood, then it is easier to predict the outcome of your trade. It will easily give you a good Forex signal to guide you in every step of your trading career. Once you have mastered a few solid price action Forex Strategy like the ones above, you are on the right track on becoming a more confident and well-informed trader. Happy investing!
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