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: Inverted hammer has exposed trendline support
EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as it faced rejection at 1.1118 and ended on a negative note.
GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline
GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.
USD/JPY: Major bull cross fails to inspire Yen bears
USD/JPY is hovering below 110.00 with yen showing resilience, despite the bullish development on technical charts. The S&P 500 futures are hinting at risk reset in the markets. A notable equity market recovery could weigh over yen.
Editors’ Picks
EUR/USD: Inverted hammer has exposed trendline support
EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as it faced rejection at 1.1118 and ended on a negative note.
GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline
GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.
USD/JPY: Major bull cross fails to inspire Yen bears
USD/JPY is hovering below 110.00 with yen showing resilience, despite the bullish development on technical charts. The S&P 500 futures are hinting at risk reset in the markets. A notable equity market recovery could weigh over yen.
Coronavirus FX Selloff, CAD Prime for Bank of Canada Breakout?
The most influential story for the financial markets today was reports that the first US case of corona virus has been confirmed. This deadly virus is spreading across the globe creating concerns about the impact on travel and consumer spending.
Gold: Stays below $1,560 following Tuesday’s bearish spinning top
Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick formation, backed by bearish MACD, during the previous day.
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