This strategy is perfect for beginners because the Pin Bar is an extremely obvious pattern in the trading chart. This obviousness makes it easy to determine the market movement and form an analysis.
As shown in the photo above, the market comes in contact with the resistance then steadies on that level, but soon enough breaks above it. When the chart shows that the market breaks above the resistance level, that resistance now turns into the new support, and vice versa. This is a basic principle in Technical Analysis.
Below is an example of a bullish pin bar:
The price breaks above resistance after several encounters with it (yellow highlight).
The Inside Bar Trading Strategy
This is among the most well-known and effective forex strategies for beginners and professionals. In comparison to pin bar, inside bar works best when it is analyzed in a continuing pattern. Below is an example of an inside bar:
It shows that the previous bar is bigger compared to the inside bar. The bigger one is the “mother bar”, and it is supposed to ‘engulf’ the smaller bar (inside bar).
Notice that on the photo above, an inside bar was formed during a price rally, as pointed by the red arrow. The most reliable inside bars to signal a trade opportunity are the ones that come in the middle of a strong rally because they represent a real consolidation period.
The Forex Breakout Strategy
This third strategy is among the easiest forex strategies for beginners to follow. This is an easy one to identify as it mostly focuses on the support and resistance levels, as well as the breakouts on these levels.
In this strategy, our support and resistance levels form a wedge pattern instead of a horizontal line.
It shows that the wedge pattern of support and resistance levels will certainly meet at a point, which the price is nearing to. At this point, it signals that the pattern is about to end.
In the price rally above, it shows that the price touched both boundaries of the wedge as pointed out by yellow highlights. It eventually breaks below the support and retests it as pointed by the red arrow. This is the signal to trade. This strategy is among the most efficient forex strategies for beginners.
To summarize the usage of the forex strategies for beginners above, you must remember the basic application of each strategy:
- When applying the pin bar trading strategy, remember that it indicates a reversal in the trend. Once the trend reverses, make an entry in the direction of the new trend.
- Compared to pin bar, the inside bar trading strategy submits to the continuation pattern, meaning an inside bar signals that the ongoing trend will continue.
- When applying the forex breakout strategy, wait for the price to retest and rebound from the boundary before making an entry.