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The speaker discusses a trading strategy that he developed based on his experience in the trading pits. He simplifies his approach to focus on price action and looks for signals of market reversals using candlestick patterns, support and resistance levels, and average true range. He encourages viewers to test his strategy on a demo account and share their outcomes. The strategy can be applied to lower time frame charts, but the speaker emphasizes that he is a trend follower and primarily uses this method for counter-trend trades.
The Power of Simplifying Trading Strategies
Introduction
Trading strategy is one of the most critical aspects of successful trading. It helps in making informed decisions when buying and selling financial assets. In this article, we discuss trading strategy and simplify it for the masses.
Background
The writer starts by giving an overview of his extensive trading career that spans over 20 years. He mentions starting in the trading pits in the City of London and how he transitioned to trading from home. The writer candidly speaks of struggling to adapt to the new environment and losing money in the early stages.
The writer simplifies the strategy back to basics as he reflects on his experience in the trading pits. The article focuses on noise levels and how it helps predict market trends. The article introduces an easy-to-follow, simple trading strategy.
Can You Trade on Lower Time Frame Charts?
The writer is a trend follower, but he teaches a strategy in this trading room for counter-trend trading. The writer believes that the simple trading strategy can work on higher timeframe charts to test whether it works on the lower timeframe charts.
He encourages traders to use demo accounts to test the strategy initially and share their feedback with him. He focuses on consolidating or reversing markets caused by buyers buying and short covers covering before the market changes direction.
The Simple Trading Strategy
The trading strategy includes three components – price action, support, and resistance, and Average True Range (ATR). The writer describes price action as it comprises the open, high, low, close, and color (bullish or bearish) of a candlestick.
The writer simplifies a bearish candlestick engulfment pattern, depicting sellers overpowering buyers, and a bullish engulfment pattern, depicting buyers overpowering sellers. He emphasizes identifying key levels to make significant reversals.
Conclusion
Simplifying trading strategies is essential in educating new traders in understanding complex strategies to trade effectively. The writer’s extensive experience and success help new traders identify the critical components of trading strategies. New traders can take advantage of the simplicity of the trading strategy shared in this article to make informed decisions.
