Predicting the forex markets can be a challenging, yet doable thing to master. The challenge lies in the requirement of constant market analysis and consistently applying your skills. Your perception of the market will help you predict trends, find the best possible entries, and exits. So it is absolutely clear that it is critical that you understand what you are seeing on your trading monitor.
When predicting the forex markets it is important to focus both on the most recent price development/candle designs, but also to never lose track of the bigger picture. There are many tools to stay aware of both and that help you be in sync with the market. Being in sync with the market means knowing the story from front to end (or most recent developments).
The story
So what is this story? I'll try to keep it as basic as possible, otherwise it will become to lengthy an article. The more detailed version of this is taught in the elite members area of Forex Watchers and from experience I know it will take some time before traders get a full grasp of it.
The story is based on reading all the candle design that has happened in the near past. How far you go back depends on the time frame you're trading, but you need to see several swings on one time frame higher. The emphasis really is on reading the market candle by candle. What did price do at which areas, asking yourself questions like "why did it react from there and not from there?" or "how come that reaction was so strong?". It really comes down to figuring out what happened and why. Trying to do this based purely on the technical read will often give you the upper hand in predicting the forex markets and even big news events. Just remember, everything happens for a reason.
Final words
Focusing just on certain candle patterns or just on the most recent developments will leave you exposed to things you don't expect to happen. Successful trading really is the sum of all your skills and education applied to the market. So you need to educate yourself as much as you can and then use that skill set and knowledge and apply it appropriately.
#UrbanForex - Be conscious of your trading!
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Editors’ Picks
EUR/USD: Bears seeking break of 2-hour support
The bears are seeking a sizeable retracement in the pair following the recent bullish spike on the daily time frame which has already started to retrace. There are prospects, at this juncture, of a retest of old support that would be expected to act as new resistance.
GBP/USD soars to 1.41 after UK elections, US Nonfarm Payrolls
GBP/USD has hit a new three-month high just above 1.41 after the SNP failed to win a majority in Scotland and as the UK is set to extend its reopening. The dollar is still suffering from Friday's weak jobs report.
USD/JPY Forecast: Bears hold the grip
US Treasury yields set the tone for USD/JPY as stocks struggle for direction. The American dollar is the weakest after terrible employment figures. USD/JPY is at risk of falling further and pierce the 108.00 level.
Editors’ Picks
EUR/USD: Bears seeking break of 2-hour support
The bears are seeking a sizeable retracement in the pair following the recent bullish spike on the daily time frame which has already started to retrace. There are prospects, at this juncture, of a retest of old support that would be expected to act as new resistance.
GBP/USD soars to 1.41 after UK elections, US Nonfarm Payrolls
GBP/USD has hit a new three-month high just above 1.41 after the SNP failed to win a majority in Scotland and as the UK is set to extend its reopening. The dollar is still suffering from Friday's weak jobs report.
XAU/USD 4-hour support is a hurdle for the bears
The price of gold is trading at $1,836.81 at the time of writing and is up on the day by some 0.30%. The bulls, however, are backing off on what could be profit-taking as the US dollar stabilises within a narrow range on Monday vs a basket of major currencies. DXY is flat and has stuck to a 90.0420/3390 window.
ETH soars above $4,000, as BTC and XRP struggle
Bitcoin price beginning to hint at a complex topping process. Ethereum price shakes off rising wedge pattern to test new Fibonacci extension level.
UK GDP Preview: Contraction to trigger correction? Sterling set for a reality check
The UK is projected to report a 1.7% contraction in the first quarter. Optimism about a vaccine-led recovery from the second quarter onward is baked into the price. A reminder of past weakness may trigger a much-needed correction after the big breakout.
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