How is your trading going lately?
You know what is what I like most about the Forex market?
There are plenty of currency pairs and most of the time, you’ll find a few good opportunities.
And if you have been following me for a while, you know that the key to get good results on any market is how you choose the instruments to trade.
You could be using the best entry system in the world, but you are trading the wrong currency pairs, the market will move against you.
On the other hand, if you have an average entry system, if you are trading the right currency pairs, sooner or later, the market will move on your favor.
That’s the reason I think you should spend at least 80% of your time analyzing and choosing the best currency pairs to trade and only 20% actually looking for your signals.
Remember that: 80% analyzing, and 20% actually trading.
The idea is to find the currency pairs that have clear swings & clear levels on both, the short term and the long term charts.
Once you have that information, you know what the market is doing, and most importantly, what it is likely to do.
Now, you’d also have more benefits with that.
If you are only trading the currency pairs that you feel most comfortable with, you’d also feel more confident with your system and you’d be able to trade it with more discipline, which helps you get consistent results.
And my friend, that’s what we are all after… consistente results.
So please, make sure you are doing your analysis before placing any trade.
Anyway, here are a few currency pairs I’m currently trading/monitoring.
GBPNZD Analysis (900 pip opportunity)
This one is probably the currency pair I like the most. First let me show you the long term chart:
The GBPNZD is currently trading 900 away from the next LT resistance level, it already has been rejected from the support level, so you know it is likely to continue its way up, at least until it reaches the next LT resistance level, which is at 2.0812
It’s got plenty of profit potential, but what I like the most about the GBPNZD is that, when it moves, it really moves, and pretty fast.
So it’s always a good idea to try to catch those swings. And as you can see by looking at its daily chart, those swings are pretty clear.
So please, go to the short term charts and look for your entry.
Here is what the daily chart is showing us:
Its clear that the USDCAD is trading in a range. And you know how to trade a range don’t you?
Right now, its being rejected from the top of the range, which means that it is in a bearish condition, which means that we should be looking for short opportunities.
So my trading plan for the USDCAD is to look for short opportunities at least until the USDCAD reaches the next LT support level which is at 1.2409.
Now, don’t worry about the entry system, you can use what ever system you feel comfortable with. I prefer to use price action, but you can use indicators, Fibonacci, even Gann if you want to.
Just make sure to look only for short opportunities (and ignore all long signals).
The Aussie is trading near an important level.
Now, you need to be careful here. When the market trades near an important level we need to be very patient.
Here is how the daily chart looks like:
As you can see, its trading near the support level at 0.7630. We still don’t know whether the market is going to get rejected from here or break through that level
But you know what, we don’t need to know… What I do here, is look at the short term chart, define the SF Box, and then create my trading plan.
Here is the 30M chart:
And there it is… my trading plan is this:
Once the market breaks through the upper ST resistance level (0.7659), I’ll start looking for long opportunities.
Once the market breaks through the lower ST support level (0.7589) I’ll start looking for short opportunities.
If the AUDUSD keeps trading inside the range, I stay on the sidelines.
Sounds like a good plan?
What do you think about the 80-20% rule? Do you spend at least 80% of your time analyzing?
Are you currently trading any of the currency pairs mentioned above?
What other currency pairs are you monitoring?
Share your thoughts.