As I said yesterday traders… we always need to trade smart… specially this week with the FOMC rate statement tomorrow…
What do I mean by trading smart?
- Trade the currency pairs or instruments that have the greatest profit potential
- Trade only when you have a clear market condition
- Trade only when you have clear support and resistance levels
- See other things that you could get advantage of (like rollover)
Follow this guidelines and you’ll be on your way to consistent profits…
Now… remember you need to have at least 80 pips on your favor to hold your trades before tomorrows announcement, otherwise just close them alright?
So here is my plan to trade the currency pair with the most profit potential right now…
Yesterday I analyzed the EURAUD, and wrote about why I thought it was a good idea to look for long opportunities…
If you didnt read it, please take a look at it.
I was waiting for a small pullback, which is what we are getting right now. But what I like the most about this pullback is the significant upward pressure.
Here is the long signal:
Have you found the clearest currency pairs to trade this week?
I’m curious about the pairs that you are currently following, please let me know in the comment section.
One of the currency pairs that I’m currently following is the EURAUD…
It is definitely one of the pairs that has the clearest support and resistance level and market swings, making it relatively simple to look for trade opportunities.
And what I like the most about the EURUAD is that it still got 750 pips to go before we hit the next LT resistance level.
Does it mean that I’m going to look for 750 pips?
Here are a few of the currency pairs I’m currently monitoring.
On some of them I’m already trading/looking for a trade opportunity, while on others, I need to wait for the market to do “something” before I start looking for a trade opportunity.
But there is something in common on all of them: CLARITY.
Clarity trumps everything in forex.
What do I mean by clarity?
It’s how clear the analysis of a currency pair is. Is it clear that the market will move up? or down? Or I have absolutely no idea of what the market is going to do?
Of course, if there is no clarity, there is no point on trading that particular currency pair, you have no idea of where it is heading right?
Clarity is so important when trading the forex market, that it can help you get good results even when you don’t have a good entry system, patience, etc.
Are you currently trading the EURAUD?
Since last week I’ve been looking for long opportunities in the EURAUD, and if you don’t trade this pair, you definitely should at least take a look at it, and see is you find it interesting to trade.
Anyway, I’ve been testing this new entry system, and I’ve got two signals since yesterday:
Do you ever trade this pair?
In the last few months I’ve found the EURAUD to be one of the clearest pairs of them all, take a look at the daily chart and you’ll see what I’m talking about.
Anyway, I see the EURAUD in a very clear bullish condition, and actually looking for long opportunities. It already got rejected from the ST support level:
Hey, hope you had a great weekend!
It’s clear that the EURAUD is trading in a bullish condition, and you already know what you should be looking for while in a bullish condition right? Well…
Yeap, long opportunities, and ignore every single short opportunity that you get.
Anyway, here is the chart:
After two weeks of intensive important fundamental announcements (which by the way, put the market in a very favorable condition, so you better get ready to trade ok?), we have a few weeks with not many (important) announcements. Is it good or bad for traders?
I guess it all depends… What’s your take? Leave your comment below.
The question I’m trying to answer with this post is: When to start looking for your trades.
This is what I do…
I look for the currency pairs with the most profit potential.
Let me explain… when the market gets close to an important level, we don’t know whether the market is going to get rejected from there, break though that level or just stall.
So, since you are just trading the currency pairs that have the most profit potential, in order to trade, you need to know what is likely to happen, right?
So what do we do? We wait… Take a look at the next EURAUD chart:
This week is going to be easy regarding fundamental announcements, we don’t have as many as we did last week, which is good, and this way the market is driven by its sentiment (not by fundamentally driven movements).
Now, one of the currency pairs I’ve been monitoring in the last weeks is the EURAUD. If I show you the daily chart you would instantly recognize that it is in a bearish condition.
Now let me know you the short term charts:
One of the things that I look for in a chart
I think that from all the currencies that I’m monitoring, the EURAUD and the EURNZD are the clearest of them all.
Take a look at their long term charts. Here is the EURAUD for instance: