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!

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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 .

  • Varahala Babu Chelluru

    hi raul …

    for the below crude oil chart short term levels are also good . can we go long here because we have significant pattern with bullish pressure

    • Raul Lopez

      Hello Varahala, I dont know what you mean by a significant patter with bullish pressure… Where is it at?

      I cant tell you if it is a good idea to trade it by only looking at your short term levels… I need more than that!

      Good luck!

      • Varahala Babu Chelluru

        hi raul…thanks .. the bullish pressurein one hour chart 93.60 … what we have to look for confirming ..by the I need more than that!

        • Raul Lopez

          Dont see that pressure…

  • Varahala Babu Chelluru

    hi raul….
    after following your website from many years i understood imp support and resistance levels…can you please confirm the levels i have drawn were valid or invalid . can we go long if it rejects from support level ?

    • Raul Lopez

      I agree with the levels you’ve at the top 107.43 and 91.68, so it seems that it is trading near an important level…

      Good luck!

  • Zaza

    I will wait on AUDUSD until it trade above 0.9112 for long or trade below 0.8983 for short. For now its not the clear pair and taking its time making its mind too.

    • Raul Lopez

      Good luck Zaza!

  • Muhammad Ali Awan

    Yes I agree with you on AUDUSD. Any idea of CHFJPY.

    • Raul Lopez

      I’m still not comfortable with the CHFJPY…

  • Varahala Babu Chelluru

    dear raul lopez,

    can we go long on usd/chf. because it has broken from an important resistance level. so it is likely to continue it`s way up. because we have plenty of room to plan the trade. and their is one random resistance level . is it a valid one or we should get rid of it ? …

    • Raul Lopez

      The USDCHF just broke through that level, but I’d wait a little longer… I wouldnt touch the USDCAD, it doesnt hace clear S&R levels…

      Cheers,

  • Eviano

    Raul. Please, can you explain the pending order usage. I am mixing them up at the moment. The different between “BUY LIMIT and BUY STOP and SELL LIMIT and SELL STOP”.

  • Chris Williams

    Raul – As for the others you mention

    USD/NOK – I was wary you will recall because of the 55 pips on offer but will give it a go on the strength of the point you made in your last email. But it seems to be thinking hard at the moment at the 6.4 level. What’s your advice?

    USD/JPY – I was pipped out for a small profit when it dipped to around 106.3. I’m now waiting to see if there is a breakout above 107.37.

    NZD/USD – I didn’t get in when it was falling from the 84 cent level. I’ve set the next long term support level at 81 cents. With it currently sitting at 81.75, I would have thought it was a waiting game for anyone like me who wasn’t holding a position.

    • Raul Lopez

      Hello Chris,

      Did you manage to trade any of them?

      Let me know.

  • Ahsun Ashfaq

    Thanks for sharing Raul. Could you please confirm that AUDCHF has been rejected from very important resistance level and now it is trading at LT support level

    Ahsun

    • Raul Lopez

      Hello Ahsun, I wouldnt feel comfortable trading the AUDCHF for now…

  • Ahsun Ashfaq

    Thanks for sharing Raul. Useful info as always :)

    Ahsun

    • Raul Lopez

      I’m glad it has been useful!

      Let me know if you need anything else.

  • Zaza

    Sorry Chris for that loss, but I am sure you will get it back soon. There is one thing I am keeping in mind that I got from Raul’s eBook is that these levels are actually zones so when ever its trading near the end of the zone I want to becarefull in opening a new trade until its clear.
    Raul thanks for bringing my attention to such.

    • Guest

      Thanks Zaza but its’not that I don’t understand that the levels should be thought of as zones. Its just that in this case if you look at the Daily Chart for the AUD/USD, the 90 cent level was not nearly as clear as the 89 cents as the next long term important level – especially when the momentum from 92 cents was so strong.

    • Chris Williams

      Thanks Zaza but its not that I don’t understand that the levels should be thought of as zones, its just that in this case if you look at the Daily Chart for the AUD/USD, the 90 cent level was not nearly as clear as the 89 cents as the next long term important level – especially when the momentum from 92 cents was so strong. But clearly I was wrong in not seeing that indeed 90 cents was indeed an important long terms level. When you look at the AUD/USD it does tend often to jump in whole 100 point leaps on the round cent but not on every round cent! So 92 and 90 were important but not 91. Looking at the Daily chart, I’m assuming 89 will be important and eventually 87 but it hasn’t spent much time at 88 for quite a while. What’s your view on the long term AUD/USD support levels?

    • Raul Lopez

      That’s correct Zaza, levels are more like zones instead of plain levels…

      Thanks!

  • Chris Williams

    Hi Raul – with the AUD/USD I was lucky enough to pick it on the way down to 90 cents – so found myself nicely in front. But unlike you – and I suspect like your angry correspondent – I didn’t see 90 cents as an important level. For all the world it looked to me like 89 cents was the important level. But once again you have been proven correct. Getting these levels right is so important. Unfortunately, while I took my profits to 90.5 cents I made the mistake of opening another trade assuming it was about to break below 90 cents, only to see it shoot back up – and so managed to lose about 75% of my profits! (grrrrr…)
    Cheers

    • Raul Lopez

      You are right Chris, having those levels right is very very important… But if for any reason you dont feel confident or comfortable about your levels, just dont trade those pairs… And find the ones you feel confident and comfortable with…

      Good luck!