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 holds onto highs despite souring mood
EUR/USD is trading above 1.22 but off the highs. US Durable Goods Orders jumped by 3.4% in January, better than expected, and jobless claims surprised with a fall to 730K. Q4 GDP upgraded to 4.1%, as expected. The dollar is down despite falling stocks and rising US yields.
GBP/USD advances towards 1.42 on dollar weakness
GBP/USD has been advancing as the dollar retreats despite higher yields and as markets cheer Fed Chair Powell's pledge to accommodative monetary policy.
USD/JPY: Bulls in control above 106.00, move beyond monthly tops awaited
USD/JPY continued gaining traction for the third straight session on Thursday. The formation of an ascending channel supports prospects for additional gains. Bulls seem poised to challenge channel resistance near the 106.70-75 region.
Editors’ Picks
EUR/USD holds onto highs despite souring mood
EUR/USD is trading above 1.22 but off the highs. US Durable Goods Orders jumped by 3.4% in January, better than expected, and jobless claims surprised with a fall to 730K. Q4 GDP upgraded to 4.1%, as expected. The dollar is down despite falling stocks and rising US yields.
GBP/USD advances towards 1.42 on dollar weakness
GBP/USD has been advancing as the dollar retreats despite higher yields and as markets cheer Fed Chair Powell's pledge to accommodative monetary policy.
USD/JPY: Bulls in control above 106.00, move beyond monthly tops awaited
USD/JPY continued gaining traction for the third straight session on Thursday. The formation of an ascending channel supports prospects for additional gains. Bulls seem poised to challenge channel resistance near the 106.70-75 region.
S&P 500: Day Ahead Outlook Inflation fears linger as doves hit turbulence
US equity markets look for direction on Thursday with mixed signals leading to steady and slightly lower trade. Inflation concerns haven't gone away as the US 10 year hits another year high at nearly 1.5%.
XAU/USD drops further to $1770 ahead of critical support
Gold dropped further during the American session and bottomed at $1769, the lowest level since last Friday. The metal erased weekly gains and is back below $1780 as US yields keep rising.
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