Categories: Trader's World

#Edutainment

Identifying the key levels and trends 

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Look at weekly chart time frame and ask yourself – Do I have an idea of the current and overall market conditions and trends? Which way is it trending? Look at the daily chart time frame and see if you can draw any other types of support and resistance. Which way is the market trending?

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A Signal

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Look for an obvious price action signal that ‘makes logical sense’ within the current market picture. For instance if the trend is upward, you will be looking for buy signals. What you’re essentially asking is whether there is a suitable entry here. If a suitable trade set up doesn’t jump at you out on a daily, four or one hour chart time frame within a few minutes – move on, there’s nothing worth trading here that day.

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Signal +…

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Once you have a trade signal, the next question to ask if there is also a confluent trade set up, i.e. other supporting factors and not just the price bar alone. If the story of the price action isn’t coherent with the trade set up, you might want to walk away from this one.

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Exit

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Have you figured out when to exit a trade? What’s your plan? Are you exiting at a certain horizontal level or are you planning to let it run because of a strong trend? Obviously, if something out of the ordinary happens during a trade you need to be flexible but normally, you should have a pre-determined exit strategy.
The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

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