Exness Trading Blog

If you're new to trading with Exness, it's essential to start with simple, effective strategies that can help you build a solid foundation. In this article, we'll explore five essential trading strategies that are perfect for beginners on the Exness platform.

Strategy 1: Trend Following

Trend following is one of the most popular and straightforward trading strategies. The basic principle is simple: identify the direction of the market trend and enter trades in that direction. As the saying goes, "the trend is your friend."

How to Implement:

Identify the Trend: Use moving averages to determine the direction of the trend. A simple approach is to use a 50-period and a 200-period moving average. When the 50-period moving average is above the 200-period moving average, the trend is considered bullish (upward). When it's below, the trend is considered bearish (downward).
Wait for a Pullback: Even in a strong trend, prices don't move in a straight line. Wait for a pullback (a temporary move against the trend) before entering a trade.
Enter the Trade: Enter a buy trade in an uptrend when the price pulls back to the moving average and shows signs of resuming the uptrend. Enter a sell trade in a downtrend when the price rallies to the moving average and shows signs of resuming the downtrend.
Set Stop-Loss and Take-Profit: Place your stop-loss below a recent swing low for buy trades or above a recent swing high for sell trades. Set your take-profit at a level that gives you a favorable risk-reward ratio (at least 1:2).

Tips for Success:

Focus on trading in the direction of the higher timeframe trend.
Be patient and wait for clear trend confirmation before entering trades.
Avoid trading during periods of low volatility or when the market is ranging.

Strategy 2: Support and Resistance Trading

Support and resistance levels are price areas where the market has historically reversed. Support is a price level where buying pressure tends to overcome selling pressure, causing the price to bounce upward. Resistance is a price level where selling pressure tends to overcome buying pressure, causing the price to reverse downward.

How to Implement:

Identify Support and Resistance Levels: Look for price levels where the market has reversed multiple times in the past. The more times a level has been tested, the stronger it is.
Wait for Price to Approach the Level: Be patient and wait for the price to approach your identified support or resistance level.
Look for Confirmation: Before entering a trade, look for confirmation that the level is holding. This could be in the form of a reversal candlestick pattern, such as a pin bar or engulfing pattern.
Enter the Trade: Enter a buy trade when price bounces off support or a sell trade when price reverses from resistance.
Set Stop-Loss and Take-Profit: Place your stop-loss beyond the support or resistance level. Set your take-profit at the next support or resistance level in the direction of your trade.

Tips for Success:

The more times a level has been tested, the more significant it is.
Support and resistance levels are not exact prices but rather zones.
When a support level is broken, it often becomes a resistance level, and vice versa.

Strategy 3: Breakout Trading

Breakout trading involves identifying key levels or patterns and entering trades when the price breaks through these levels, indicating the start of a new trend or the continuation of an existing one.

How to Implement:

Identify a Consolidation Pattern: Look for periods where the price is trading within a narrow range, forming patterns such as triangles, rectangles, or flags.
Wait for the Breakout: Be patient and wait for the price to break out of the consolidation pattern with increased volume.
Enter the Trade: Enter a buy trade when price breaks above resistance or a sell trade when price breaks below support.
Set Stop-Loss and Take-Profit: Place your stop-loss inside the consolidation pattern. Set your take-profit based on the height of the pattern projected from the breakout point.

Tips for Success:

Look for increased volume to confirm a valid breakout.
Be aware of false breakouts, where the price briefly breaks a level before reversing.
The longer the consolidation period, the more significant the breakout is likely to be.

Strategy 4: Moving Average Crossover

The moving average crossover strategy is a simple yet effective trend-following strategy that uses two moving averages of different periods to generate buy and sell signals.

How to Implement:

Set Up Moving Averages: Add a fast moving average (e.g., 10-period) and a slow moving average (e.g., 50-period) to your chart.
Identify Crossovers: Look for points where the fast moving average crosses above or below the slow moving average.
Enter the Trade: Enter a buy trade when the fast moving average crosses above the slow moving average (golden cross). Enter a sell trade when the fast moving average crosses below the slow moving average (death cross).
Set Stop-Loss and Take-Profit: Place your stop-loss at a recent swing low for buy trades or a recent swing high for sell trades. Set your take-profit based on previous support and resistance levels or use a trailing stop to capture the trend.

Tips for Success:

This strategy works best in trending markets and may generate false signals in ranging markets.
Experiment with different moving average periods to find what works best for your trading style and the instruments you trade.
Consider using additional indicators to confirm the signals generated by the moving average crossover.

Strategy 5: RSI Divergence

RSI (Relative Strength Index) divergence occurs when the price makes a new high or low, but the RSI indicator doesn't confirm this move. This can signal a potential reversal in the market.

How to Implement:

Add RSI to Your Chart: Set up the RSI indicator with a 14-period setting (the default).
Identify Divergence: Look for situations where the price makes a higher high but the RSI makes a lower high (bearish divergence), or where the price makes a lower low but the RSI makes a higher low (bullish divergence).
Wait for Confirmation: Before entering a trade, wait for additional confirmation, such as a reversal candlestick pattern or a break of a trendline.
Enter the Trade: Enter a sell trade on bearish divergence or a buy trade on bullish divergence after confirmation.
Set Stop-Loss and Take-Profit: Place your stop-loss above the recent high for sell trades or below the recent low for buy trades. Set your take-profit at a previous support or resistance level.

Tips for Success:

RSI divergence is most effective when it occurs in overbought (above 70) or oversold (below 30) territory.
The more extreme the RSI reading, the stronger the potential reversal signal.
Always wait for confirmation before entering a trade based on divergence.

Conclusion

These five strategies provide a solid foundation for beginners trading on the Exness platform. Remember that no strategy is perfect, and each has its strengths and weaknesses. The key to success is to understand the market conditions in which each strategy works best and to apply proper risk management at all times.

Start by practicing these strategies on a demo account until you're comfortable with them. Once you've gained confidence and consistency, you can gradually transition to a live account with real money. Always start with small position sizes and increase them only as your experience and success grow.

Ready to put these strategies into practice? Open an Exness account today and begin your trading journey with these proven beginner-friendly strategies.