I am often asked what it is that I am looking for when I look at the forex daily charts. The answer is really simple. The same as every other chart ! Trends, support & resistance, break outs, fib bounces, emas etc etc.
The great thing is that anyone can trade At any time of the day off daily charts. You have so much time to decide what you are going to do.
The main difference is that when you place a trade based on the daily charts you normally have to place a much bigger stop loss. However, occasionally, like today’s example that is not the case.It only needed a 50 pip stop loss for a possible 150+ pip gain = excellent risk/reward.
I posted the following on twitter this morning;
“euro/gbp VERY interesting on daily. last 5 days moved sideways along 61.8 fib if breaks now cud pop to 88 area (150 pips below)”
clear break of strong support trend line on euro gbp daily chart
For a more detailed in depth explanation of this trade, have a look at the article that I just posted on my main site in the forex free training section;
http://www.forex-fxtrader.com/forex-trade-example-from-daily-chart.html
I like your trading style among other things forex is an amazing market to trade. Also since I started trading months ago, I find divergences within the pairs, like EUR/USD long then USD/CHF falls. I guess this is what alot of people refer when they speak of basket trading. I’ve made a killing so far trading opposite divergence with this pair.
hi, thanks for your input. glad to hear you are doing well. if you would like to explain a little more what you look for that would be a great help. I do look for macd divergence, but only when its really obvious. what do you look for ? what settings do you have for macd etc ?
Just one thing to point to those of you who you reading this post. If you are new to forex trading; be careful. If you trade chf/$ & euro/$ at the same time its almost the same “bet”. 80+% of the time if the chf is going up, the euro is going down. therefore if you only risk say 3% of your bank per trade, many experts would tell you to halve your stakes.
I usually trade the euro, full lots but only if the chf is going the other way. Personally I find that once the euro starts to move it is more definate movement. The chf can be a really frustrating pair. it seems to stop at every ema along the way. Also there is more movement/possible gain per day on euro. euro average last 90 days is 232 pips. chf average daily range is 190.