There is one strategy that seems to work very well for me. It might for you too. And based on my testing, it more often works than not. It is what I am going to call the Support and Resistance Trading Strategy (should have gotten a drum roll before the name!) Oh! How original...
The thing is, there is a reason why a price moves back from a support and resistant. These are areas where there is a big amount of buy or sell orders, and it keeps bouncing off and on at these areas over and over again.
Stick around while I post live trades of this strategy in this blog. Note, that on a monthly basis, I would probably get about 2 trades a pair, and I need to tell myself to be more brave and ride out the trade till the end (the fear part is still killing me).
For a start, here is a EUR/AUD Trade that was placed earlier today (got in a bit late on the trade, but I guess I will stick on for a while):
The trade was entered late as I was not on my PC when the trades were on, and besides, I dont usually trade the EUR/AUD anyway.
Never the less, on the trade above, point A had previously shown to be a support with price bouncing off of it. What one could do is place a buy order say about 10 pips above from the previous low. Now, don't be greedy and go after every pip, and besides, support and resistance my way does not pinpoint to an exact entry, but more of a range.
The green line at point B is my target. This region has shown tendency for a resistance region. I could go short once I see price failing to break out of the B region, for a target of A again, or if price closes above B, I would look for opportunity to enter another long if price would rebounce off B (as B would then become the support). A bounce off B would give a good trade of up to 400 pips! So lets keep an eye out on this for a while. Cheers!
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