When to start looking for trade opportunities (with example)
After two weeks of intensive important fundamental announcements (which by the way, put the market in a very favorable condition, so you better get ready to trade ok?), we have a few weeks with not many (important) announcements. Is it good or bad for traders?
I guess it all depends… What’s your take? Leave your comment below.
The question I’m trying to answer with this post is: When to start looking for your trades.
This is what I do…
I look for the currency pairs with the most profit potential.
Let me explain… when the market gets close to an important level, we don’t know whether the market is going to get rejected from there, break though that level or just stall.
So, since you are just trading the currency pairs that have the most profit potential, in order to trade, you need to know what is likely to happen, right?
So what do we do? We wait… Take a look at the next EURAUD chart:
The EURAUD traded near an important long term level and it stalled around it. This is good because now, with this little range, we know exactly when to start looking for trade opportunities.
There will be no more guessing, if the market breaks the top of the range (upper green level) I start looking for long opportunities.
If the market breaks the bottom of the range (lower green level) I start looking for short opportunities.
In this case, the EURAUD broke the top of the range, therefore I’m looking for long opportunities.
In fact, the EURAUD is one of the currency pairs that I like the most this week.
What do you think?