Here is when to trade the AUDUSD (and the main principle of price action)

technical indicators

Yesterday I received an email, a trader from Europe asked me if it was a good time to short the AUDUSD…

I told him that not yet, from the way I see it, it is trading near an important level and we still dont know whether the market is going to get rejected from there or break through that important level…

Earlier this morning he replied back, he was a little angry I must say… And said something like “I thought you were a good trader, how come you dont think about going short right now if it has been falling like a rock…”

Basically, he is right, the AUDUSD has been falling like a rock, but again, from the way I see it, its still not a good time to short it…

Knowing in what direction to trade is just part of the job, having a good entry is the other part of the job. Even if you are right in the direction, if you don’t trade it at the right moment, you might get stopped out and then the market will continue in the intended direction…

The Main Principle of Price Action

If you are going to learn one thing about price action, make it this:

Most of of the time, the market moves from one level to the other.

Let me show you the AUDUSD long term chart so you know exactly what I mean by that:

AUDUSD 1D

As you can see, it is trading near an important LT level, I know something is going to happen around that level, either the market is going to get rejected from there, or it will break through that level down, and continue to move in that direction until it reaches its next level…

Since I’m trading based on price action, I’m not going to try to guess what is going to happen, I’m just going to patiently wait for the market to start moving, then I’ll follow…

So you need to patiently wait for the right moment to trade… That’s one of the reasons traders must be very very very patient…

USDNOK, USDJPY and NZDUSD updates

For those of you asking about the trades that I wrote about last week… the market conditions on all of them are still valid…

The market has been moving a little slow on all three of them, but on our favor, so that’s good…

USDNOK still bullish, USDJPY still bullish and NZDUSD still bearish…

Your Turn

Do you follow price action? What do you think about the main principle of Price Action? Do you agree with it?

What about the AUDUSD? Do you agree with me or with my fellow trader?

What about the USDNOK, USDJPY, NZDUSD, did you trade them? Are you still holding them?

Share your thoughts!

AUDUSD, forex, price action


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 .