Here is how you can apply The SF Box technique

Last week I released a Free eBook about The SF Box, which is a very powerful concept that can change the way you see and trade the market for good.

It answers two fundamental questions about trading:

  • What currency pairs to trade
  • What direction to trade them

So if you haven’t, Download the Forex eBook from here, while it is still FREE. (it has been downloaded thousands of times already).

And based on the feedback you have emailed me, I know its been very helpful.

Anyway, here is a real example of how you can apply The SF Box in the GBPAUD.

Long Term Analysis

What do you think about the weekly chart?

GBPAUD Weekly

You might say: alright, the GBPAUD is already trading above the long term resistance level, it might be a good idea to look for long opportunities.

Do you agree with this?

Well, not so fast. It’s impossible to arrive to that kind of conclusion without looking at the short term charts.

Short Term Analysis

Here is what the short term chart looks like:

GBPAUD Hourly

In this chart you see that the weekly orange level is in between both green short term S&R levels.

Now, you know we should consider the long term support and resistance levels as zones instead of plain levels right? Ok.

Now, three things could happen when the market gets near a long term S&R level:

  • The market breaks through that level
  • The market gets rejected from that level
  • The market stalls around that level

Ok, lets go back to the hourly chart, and I can see that right now it is not a good idea to look for a trade opportunity, because the GBPAUD is trading in between The SF Box.

So if you thought at the beginning of this post that it could be a good time to look for long opportunities, forget about it…

What you can do instead is to write down your trading plan for the GBPAUD:

You know that if the market breaks above the short term resistance level (upper green level), it is likely to continue its way up (it will break the orange resistance level on the weekly chart).

You also know that if the market breaks below the short term support level (lower green level), it is likely to continue its way down (it will get rejected from the orange resistance level on the weekly chart).

And since it is not trading in a well defined range (yet), we cant trade inside the short term range.

Now you have a complete trading plan… it tells you what you need to do based on what the market does.

Instead of guessing, you are adapting to the market condition.

Do you see the potential in this?

Makes sense?

Your Turn

What did you think about the eBook? What do you think about The SF Box?

What about my plan to trade the GBPAUD?

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Montreal Yess

    Hello, how long is the SF Box? a week? two weeks? i know is measure by hours but i didn’t get how long the total length was. Thank you Raul

    • Raul Lopez

      Hello Montreal, very good question!

      Look, its different from time to time! The one thing that you can be certain about is that most of the time, when the market gets close to an important level, the market will range on the short term charts…

      So you need to keep an eye open! Determine the range, and trade accordingly!

      This technique works remarkably well!

      Let me know if you have any other question!

      • Montreal Yess

        Thank you for the quick reply! I will keep an eye open when it gets close to an importance level. That means the box could be very small too, like 5 hours. or it could be bigger like a week or so. I read your ebook and I’m very close to understand the SF box. Thanks a lot Raul.

        • Raul Lopez

          Thats correct, might last 5 hrs or a week… You can also take advantage from it, if its got clear S&R levels, you can take trades off of both extremes of the range!

          • Montreal Yess

            i been trying to do this but I still don’t understand, the way i do it the market doesn’t respect the box, it goes out of the box a little bit then comes back to the box again. looks like the box is already form but in reality the box still forming.

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  • Tunde

    HI Raul, it looks like the AUD/USD is giving way for a further bearish move to the 0.8800 zone. I cant find an SF box yet on a lower time frame , but im thinking a pull back to 0.92700 may do. I hope i’m catching up with your technique. what do you feel?

    • Raul Lopez

      Hello Tunde, the AUDUSD already broke The SF Box… it is already in a bearish market condition. Look for short opportunities.

      Good luck!

      • Tunde

        thanks

        • Raul Lopez

          No problem!

  • richard

    Thank you for the E book – interpretation and anticipation based upon r and s levels is a critical skill for a fx trader. Your GBPAUD pair analysis shows that it is best to not trade if there is no clear opportunity – the SF box helps me get this clarity. Many thanks

    • Raul Lopez

      yep, interpretation and anticipation are critical skills for a trader, this is why we all need to identify the clearest currency pairs of them all, and focus only on them.

      Thanks for your comment.

      Cheers,

  • Tunde

    Hey Raul, any time i see your messages in my mailbox, i lick my lips, You enlighten me all the time
    Thank you

  • Claudio Anton

    Excellent analysis, simple, easy to follow and is working (-:

    Thank you Raul

    • Raul Lopez

      Hey Claudio, I’m glad it’s been working for you!

      Cheers,