The strategy aims to provide accurate forex trading signals by leveraging support, resistance, smart money concept, and fair value gap analysis. It begins by utilizing support and resistance levels to predict buy and sell signals. For example, when the price bounces off a support level, it signals a buying opportunity. Conversely, resistance levels indicate selling opportunities. This approach is enhanced with volume analysis and backtesting for greater accuracy.
The smart money concept involves analyzing market patterns to identify institutional trading activities. Traders consider accumulation or distribution phases and volume fluctuations to pinpoint smart money movements. This analysis is combined with existing support and resistance strategies to verify trading decisions.
Lastly, analyzing fair value gaps involves identifying discrepancies between market closing and opening prices. Traders watch for these gaps, especially during high volatility, to plan entry points. The gaps are marked historically for future reference. This technique is paired with the previous strategies for comprehensive signal validation. Software tools are used to ensure precision, while ongoing market education aids in refining the approach.
The strategies
⛳️ Strategy 1: Utilise support and resistance levels
- Identify key support and resistance levels on the currency pair charts
- Use historical data to confirm the significance of these levels
- Schedule regular reviews to update the levels as market conditions change
- Set alerts for when price approaches these levels
- Utilise support as a buy signal when the price bounces off it
- Utilise resistance as a sell signal when the price reverses from it
- Combine with volume analysis to confirm strength of bounce
- Employ stop-loss orders slightly beyond these levels
- Backtest this approach using historical data for effectiveness
- Adjust strategy based on the backtest results
⛳️ Strategy 2: Incorporate smart money concept
- Study market patterns indicating accumulation or distribution by institutional players
- Use volume analysis to identify potential smart money activity
- Monitor for false breakouts as potential smart money traps
- Set a watchlist for major currency pairs most influenced by institutional traders
- Look for major price moves following muted periods as smart money involvement
- Integrate smart money analysis with support and resistance levels
- Use smart money signals to confirm buy or sell decisions
- Educate on institutional strategies and their common patterns
- Develop an alert system for when smart money activity is detected
- Constantly refine understanding with ongoing market education
⛳️ Strategy 3: Analyse fair value gaps
- Identify gaps between market closing and opening prices that indicate fair value gaps
- Use high volatility periods to spot significant fair value gaps
- Mark historical fair value gaps for future reference
- Watch for prices returning to fill these gaps as potential entry points
- Integrate fair value gaps with support and resistance for signal confirmation
- Backtest fair value gap trading to ensure reliability of signals
- Implement entry and exit strategies around fair value gaps
- Utilise software tools for accurate identification of gaps
- Stay updated on economic news that might affect fair value gap formation
- Use fair value gaps in combination with smart money concepts for strengthened signals
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
