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If you are not familiar with article submission, let me just fill you in on one fact, your article will not be published for several days.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.
Eddie has trained traders for 10 years. His
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