- This article, written by Patric Tengelin is taken from the FX Trader Magazine (JAN/MARCH 2013 issue).
In the stock market, the ultimate stock to day trade is whichever best fits your trading style and produces enough profits to buy 100 new shares faster than trading any other stock. We are market technicians and our favourite FX pair is the EUR/USD on the 30-minute chart. Technical analysis is not so much about the actual lines on the chart as it is trading the reaction of other traders at those lines.
By the end of this article you will have a clear understanding of how to eliminate the guesswork in trading and always be on the right side of the market.
This particular strategy will appeal to reactive traders who do not front run price action. The entries will be inferior but the hit rate superior. The equity curve will not be subject to the wild swings s o m e t i m e s experienced by anticipatory traders who constantly try to pick tops and bottoms but before we get into the meat of the strategy and when it is most profitable we need to make a few assumptions. We will list days when you should not trade at all and then talk about the time of day when you should look for setups. You will also learn about the key numbers for the EUR/ USD and how they constantly show up as support and resistance. Throughout the article we will give examples of the mechanics behind price movements and how to interpret price action, but let us first talk about indicators.
Editors’ Picks
EUR/USD remains on the defensive below 1.0400 on hawkish Fed rate cut
The EUR/USD pair weakens to near 1.0370 during the Asian trading hours on Thursday. The hawkish rate cut by the US Federal Reserve lifts the US Dollar and drags the major pair lower.
GBP/USD edges higher to near 1.2600 ahead of BoE rate decision
GBP/USD gains ground after declining more than 1% following the Federal Reserve’s hawkish cut on Wednesday, trading around 1.2590 during the Asian hours on Thursday. The Pound Sterling gains upward support as the Bank of England is anticipated to keep interest rates unchanged later in the day.
USD/JPY extends rally toward 157.00 on BoJ Ueda comments
USD/JPY preserves its bullish momentum and climbs toward 157.00, refreshing monthly highs following the BoJ's decision to leave policy rate unchanged. In the post-meeting press conference, Governor Ueda said they will adjust the degree of easing if the price outlook is to be realized.
Editors’ Picks
GBP/USD edges higher to near 1.2600 ahead of BoE rate decision
GBP/USD gains ground after declining more than 1% following the Federal Reserve’s hawkish cut on Wednesday, trading around 1.2590 during the Asian hours on Thursday. The Pound Sterling gains upward support as the Bank of England is anticipated to keep interest rates unchanged later in the day.
EUR/USD remains on the defensive below 1.0400 on hawkish Fed rate cut
The EUR/USD pair weakens to near 1.0370 during the Asian trading hours on Thursday. The hawkish rate cut by the US Federal Reserve lifts the US Dollar and drags the major pair lower.
USD/JPY extends rally toward 157.00 on BoJ Ueda comments
USD/JPY preserves its bullish momentum and climbs toward 157.00, refreshing monthly highs following the BoJ's decision to leave policy rate unchanged. In the post-meeting press conference, Governor Ueda said they will adjust the degree of easing if the price outlook is to be realized.
Gold price sticks to recovery gains; not out of the wood yet amid Fed's hawkish tilt
Gold price attracts some haven flows amid the post-FOMC sell-off in the equity markets. The Fed’s hawkish outlook continues to lift the US bond yields and caps the XAU/USD. Traders now look to the US Q3 GDP for some impetus ahead of the US PCE data on Friday.
Sticky UK services inflation to come lower in 2025
Services inflation is stuck at 5% and will stay around there for the next few months. But further progress, helped by more benign annual rises in index-linked prices in April, should see ‘core services’ inflation fall materially in the spring.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.