- 15 Mins Special Bars
- Momentum Analysis – Part 1
- Momentum Analysis – Part 2
- Momentum Analysis – Part 3
- Quick Recap
When it comes to Forex, everything is not just black and white. Instead, there are shades of gray in between. That’s why we need to look at various caveats that impact our trading decisions.
Earlier we established the rule that the breakout bar needs to be at least 10 pips wide. That arbitrary marker alone doesn’t suffice. We need to see what that bar really means in relation to previous bars. If the markets are volatile then previous bars could be longer. At that point, then our measly 10 pips breakout bar doesn’t hold any significance. Ideally we should see small bars followed by a larger breakout bar.
The London session by far provides the most setups compared with Asian and US sessions. Although, AUDUSD is likely to break out in the Asian session for obvious reasons. At times when the market is trending strongly, we may see breakouts in all other pairs in Asian session as well. We only trade up until the early US session; trade setups do occur after that but I am usually not around to trade them.
From experience I’ve gathered that the market moves in 3-2 day cycle. By 3-2 I refer to Monday, Tuesday, Wednesday and then Thursday, Friday. If the market happens to move only 20-40% of weekly ATR on the first three days representing pretty much a sideways movement, then it is quite likely that it will pick up steam during last two days. What does that means for us? Knowing the market rhythm helps us trade at the right times.
We trade four pairs at the time of writing EURUSD, EURJPY, GBPUSD and AUSDUD. A selection of these pairs is not arbitrary. It is not about personal choice; everything we do has to make sense.
Recall we mentioned ATR earlier, these pairs offer the highest Range compared with their usual spreads. Pairs like EURAUD and GBPJPY also have high ATR but their spreads are much higher which increases our risk exposure.
There is the last caveat, that’s a big one. It needs its own section. A must read before you start placing trades!
No TIME!! That was always my problem. This Trade Copier has been long time coming, glad it is finally here.
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