I know you are going to ask me, what do you mean by easy?
Well, from my point of view, the easiest currency pair to trade is always the clearest currency pair.
You see, when the market its clear, its way easier to trade because you know what it is likely to do, if its got clear S&R levels, you know at what levels the market is likely to reverse, etc.
Before trading any currency pair, you need to ask yourself 3 questions:
- Am I going to trade this pair? (Is it clear enough?)
- Which direction am I going to trade this pair?
- Until when am I going to trade this pair?
When the market its clear, you have an easy answer to those three questions.
On word of caution though
Tomorrow we’ve got two very important fundamental announcements:
- GBP, MPC Official Bank Rate Votes
- FOMC Meeting Minutes
The second ones has proven to be the most important announcement of them all (even more impotent than the non-farm payrolls report).
And as you already know, everything is possible with these kind of announcements… so be careful alright?
So this is why I think the EURNZD is the easiest currency pairs to trade right now:
The first thing that you notice in this chart is that it’s got both: clear S&R levels and clear swings.
Ok, lets see if we get an answer to each one of the three questions above:
Am I going to trade this pair?
Yes, of course, it’s got clear S&R and clear swings, that makes me feel comfortable and confident about how it might behave in the following hours/days.
Which direction am I going to trade this pair?
There is one important principle that you should know about the market: most of the time, it moves from one important level to the other.
So in this case, since it was rejected from an important support level, it is likely to continue its way up until it hits the next resistance level.
Until when am I going to trade this pair?
I’m going to keep looking for long opportunities until it reaches the next LT resistance level which is at 1.6276. Once it gets there, I’m going to wait and see whether the market breaks through that level or gets rejected from it.
Ok, now that you’ve got an answer for each one of the questions above, its time to look for your entry level.
What do you think about the methodology I use to choose the currency pairs to trade?
How do you choose what currency pairs to trade?
What do you think about the EURNZD?
Share your thoughts