I understand that hindsight is 20/20, but I believe that there is still a great deal to be learned by looking back at Forex trading. Although this article was written ahead of the trading action I am going to discuss, by the time you read this the trading activity which we're discussing will have already taken place.
If you are not familiar with article submission, let me just fill you in on one fact, your article will not be published for several days. I just want to make it clear that none of the information that you are reading has been written after the fact.
We had a strong bounce up on Friday, which if you are not careful could have hurt you. I hope you all saw the reversal indicators, especially on the 4 hour chart.
It gave us a shooting star Doji and a double bottom tweezer. Followed by a sharp angle up reversal of the MACD with eventual cross above the signal line, with the 1 hour MACD already on the buy side of the signal line, and price action going against you, you had to cancel the sell order, if you had placed one.
So much for Friday, what about today. Well the market is banging up against resistance right now trading around 1.7460. This resistance is pretty strong with multiple levels in a tight region which goes from 1.7460 all the way up to 1.7510.
Consolidation should be expected for the next few days with the early bias on the up side, but if the resistance holds below 1.7510 we will expect the price action to resume its downward move towards 1.7048.
As we discussed previously, this is a very tough market to make money in. The daily ranges just get too tight to be able to get in trades and hit profit. There have been very few definable significant trend to ride.
It is all the more important to adhere to your risk vs. reward and money management rules, and you follow what the charts are telling you as far as trend direction and support and resistance, you can be very successful.
The importance of a quality trading strategy is exaggerated in this type of market. The best way to establish a strategy is by education.
Learning to develop your own trading strategy is the most important step you can take in your Forex trading career. Get a quality Forex trading education, whether in the form of an elite Forex trading course, or Forex seminar.
We are firmly in a downtrend from 1.7593, and longer term from 1.7933. We have been breaking through support all week, and until we get signs or indications otherwise, the market should continue it's downward move.
The next area of support is minor around the 1.7280 swing low, followed by the cluster around 1.7230 and more around 1.7147 heading down towards a complete retracements of the 1.7048 to 1.7933 move @ 1.7048.
This current move could certainly continue even beyond the 1.7048 level and become a continuation of the overall down trend from 1.9549. We have further confirmation via Technical indicators.
The Daily MACD has joined the 4-hour MACD in crossing to the sell side of the signal line, with what appears to be a significant crossing angle.
Our resistance levels were just a little off last night, which is not to say they were bad, but we have gotten spoiled, hitting our entry levels every night this week within a couple of pips.
The first area of resistance, most of our traders would use for a possible entry, was around 1.7460 last night. The market went as high as 1.7449. When you look at the fact that a majority of our traders use about a 10 pip cushion, we were right there.
We are currently trading around the 1.7345 level. It appears the down move is fully in place, and should continue towards the previous lows at 1.7280.
If this should not hold, and we have no indication it should, we would be looking towards the next cluster of resistance at 1.7230 and 1.7048.
If a bounce back up should occur, it would be testing the resistance cluster around 1.7600.
This is a very tough market to make money in. The volatility dries up and the daily range gets tight. Even with these conditions if you, if you adhere to your risk vs. reward and money management rules, and you follow what he charts are telling you as far as trend direction and support and resistance, you can be very successful.
Once you become comfortable with a set of indicators, technical or fundamental that you use. Analyzing charts to find good support and resistance levels could take less than 30 minutes per day.
The best way to gain the knowledge you need to find these levels, and profit from them is with a Forex trading education. Whether it be an elite Forex trading course or a Forex seminar, it is important that you find something that works for you.