This is the best pair to trade today

One

One of the most common mistakes traders tend to make is to focus just on one or two currency pairs.

Let me tell you what happens when you decide to do that…

You see, sometimes it’s very difficult to determine what the market is likely to do… And not because we are not good traders/analysts but because sometimes the market behaves in unexpected ways…

That’s it!

There are days that it’s just impossible to trade!

If you focus in just one or two currency pairs, you are going to force yourself to take trades when the odds aren’t on your favor…

What do you think will happen if you constantly trade against the odds?

Sooner or later your account will suffer…

Now, imagine that instead of trading just with one or two currency pairs, you decide to expand your horizon and look for the currency pairs that have the clearest market conditions?

So at the end, you are will be trading with the odds on your favor.

And the same question…

What do you think will happen if you constantly trade with the odds on your favor?

Sooner or later your account will thank you…

Ok, so now… How do you decide which currency pairs to trade?

Let me show you this NZDJPY chart:

NZDJPY 1D

What do you see in this chart?

  • Clear S&R levels
  • Clear market swings

That’s it!

That’s all the information you need…

When you see clear S&R level and clear market swings, you know what the market is doing and what it is likely to do.

Since the NZDJPY got rejected from the upper resistance level you know that it is likely to continue its way down… so what are you going to do?

Look for short opportunities…

Nothing more…

And you are going to keep doing it at least until the market reaches its next support level at 86.38

You dont need more information than that!

So even if you are a daytrader, you need to look at the long term charts to determine what currency pairs to trade.

Your turn

How do you filter out the bad trades?

How do you choose which currency pairs to trade?

Are you gong to trade the NZDJPY?

Share your thoughts.

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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 .

  • TasosK

    Hello Raul,

    The direction of this pair is south, agreed.

    Where would you look for short opportunities? Would you wait for the pair to retrace near the LT resistance and/or near the ST resistance (i.e. near the LT resistance zone)?

    Thank you! Tasos

    • Raul Lopez

      Hello Tasos, yep, in this case I’d be waiting for a retracement, or a possible breakout trade off the previous low…

      But right now it’s too late I think, the European market is about to close, and the volume will drop down…

      So I’ll suggest you to try again next Monday!

      Have a great weekend!

  • Waqas Khan

    thanks Raul

    • Raul Lopez

      No problem Waqas! Have a great weekend!

  • Eric Aroh

    Hi Raul,

    Thanks for confirming the direction of this pair, which I started trading (This afternoon – 16H00 Nigerian time). I live in Nigeria.

    The LT trend indicated general upward movement, but the pair had exhibited ranging characteristics during 14Mar – 11Jun 2014; I was actually in doubt if to trade the uptrend or wait for the “range” to be fully established – which provided signs since the 14th.

    I increased analysis on the pair since 14Jul2014 – using the Daily chart time frame. 14th ended bullish, 15th was bearish engulfing, signifying possible short entry. Though 16th provided a bearish candle, the candle body (volume) did not encourage my entry. I however entered today @88.30 just below the tail (bottom wick) of the previous day’s bearish candle.

    So I am in the trade (with just 1.5 standard lot); and thanks for your confirmation that I may be on the right path.

    Raul, please I need your comments on my entry strategy.

    • Raul Lopez

      Hello Eric,

      I dont take candlesticks patterns off the daily chart as confirmation, but the market condition, and since it was rejected from the resistance level, I know it is likely to continue its way down… that’s all….

      And that’s the reason I’m currently looking for short opportunities!

      Good luck with your trades!

      • Eric Aroh

        Raul,
        Thanks for sharing. Your approach makes trading forex not very difficult. One question though, …, how many times will it be rejected from that resistance to qualify is real rejection? And the trades reverses , sometimes despite several rejections.
        Thanks.

        • Raul Lopez

          It needs to get rejected twice from an important level in oder to be considered an important level.

          Cheers,

  • Henry

    Hi Raul
    Hope your well. I am in the trade and currently up by a little but it was just about at my 2-1 risk reward ratio. Is RR a factor in your decision to trade.

    Regards

    • Raul Lopez

      Yes Henry, in fact, if I dont have a least a 2:1 RR ratio I dont take the trade… So I guess your trade is alright, 2:1 is good enough!

      Good luck!

      • ram

        raul the trade hit profit…..thanks

        • Raul Lopez

          I’m glad you took advantage from this trade Ram… congrats!