Wednesday, December 18, 2013

You can use the Fibonacci tool

Knowing  how to read the charts will make you money. Placing a short or long trade after a weak bounce in a currency pair is something you need to learn.
 When you have a good trend either up or down look for a re-tracement for a possible trade entry.
 It looks like EUR/USD bottomed out after hitting 1.3600 and it may be re-tracement time. Another short opportunity? The same is true if the trend is up you can make a long trade after a weak re-tracement. Remember you need to have a good trend in place.Study the forex chart below and you will see this same pattern develop when you have a established trend.
Forex traders need to recognize this chart technical setup that is breaking the original trend. The pair is in a downtrend on the four hour chart and many times if you are day trading you will see this on a 5 minute chart. and because it looks like it is retracing, You can use the Fibonacci tool to find potential resistance points. It looks like the price between 1.3750 to 1.3850 may be a great area for a possible trade, and depending on price action and volume. You could make a trade in this area on the chart. It looks like traders could push up the market to that area as stochastics show the pair is just coming out of an oversold environment.  The forex news from the U.S. is that 9.7% unemployment rate may be attributed to those who were looking for jobs have stopped looking, thus decreasing the labor pool. Any economic news can effect the forex market and change the trend. If you are day trading make sure to check the trend on the 15 or 30 minute charts.
  The U.S. jobs picture looks confusing at the moment, but potentially worse after the previous month reports. If it doesn't start picking up you can look for traders behavior to continue to pick up, and that may pose well for the USD.