Reliably Finding Strong Price Levels to Trade

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How To Trade Key Chart Levels in Forex

Today’s Forex trading lesson contains trading strategies that you can put to use immediately in the markets. We are going to discuss how to trade price action from key levels in the Forex market. Key levels occur in a variety of market scenarios, and we can combine these key market levels with simple price action strategies to obtain a high-probability trading strategy.

Key market levels are the core foundation of all technical analysis and price action trading. By focusing on the raw price dynamics and key levels in a market, we can remove the clutter and confusion that so many trading systems and strategies are full of, and instead trade from a clear and objective mindset. I cover all the concepts discussed in today’s article in greater detail in my trading course, as well as a plethora of other simple yet highly effective trading strategies.

Note: All charts in this lesson reflect the daily time frame.

Trading from support and resistance in trending markets

Trading with the dominant daily trend is the primary technique I use to trade the markets. Much of my course is dedicated to trend analysis and teaching traders to trade simple price action strategies in the context of a trending market. We can look for price action signals forming near levels of support and resistance that develop as a result of the natural ebb and flow of a trending market.

In the example chart below we have the daily GBPUSD showing about the last 4 months of data. What I have done here is simply drawn in the obvious key support and resistance levels and then highlighted the valid price action trade setups that formed near these levels. No magic or “robots” here, just simple common-sense trading using the natural dynamics and levels in the market:


Trading from support and resistance in range-bound markets

Unfortunately, the market is not always trending, in fact it’s often said that markets spend more time consolidating and moving sideways than they do in trending conditions. Fortunately, with knowledge of how to trade simple price action setups from key levels, we can effectively trade range-bound markets as well.

In the example chart below we see the daily EURUSD from about the end of May to mid September of this year. We can see an obvious trading range that developed in this period of time and some price action setups that formed off the support of the range. Note that just before the trading range finally broke out lower, a long-tailed pin bar formed that showed rejection of the interior of the range, once the low of this pin bar broke we saw a significant move lower. Trading ranges can be a bit erratic but if you watch the boundaries of them closely you will often see some solid price action signals form at the key support or resistance of the range.

Trading from swing points in trending markets

As a market makes new highs or lows it forms what I call “swing points” in the market, these are very important levels to watch because they essentially create new support or resistance. As such, a swing point does not need to be “confirmed” by multiple rejections of price in order to be considered a valid support or resistance level, rather the actual swing in the opposite direction itself creates a new level of support or resistance.

When we see price approaching a recent swing point we can be on alert for price action setups forming near it. A recent swing high will often act as support in an uptrend, and a recent swing low will often work as resistance in a downtrend. Let’s look at a chart to see this more clearly.

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In the example chart below we see the daily EURUSD from about mid-August until now. We can see that price came down and found support near 1.3600 in mid-September. This swing point then became very important for the subsequent price action forming near it, acting both as support and resistance.

Trading from dynamic EMA support and resistance in trending markets

I use exponential moving averages (EMAs) on the daily charts to help with trend analysis and identification of dynamic support and resistance levels. For today’s lesson I am going to discuss how I use the daily 8 and 21 EMAs to highlight key levels in the market to trade price action from.

In the example chart below we have the daily EURUSD showing about the last 4 months of data. I have applied the daily 8 and 21 period EMA’s (applied to close) and then I simply watch for price action setups forming at the EMA levels or in between them, in the EMA “layer”, when the market is trending. When the EMA’s are crossed lower and diverging, we have downward momentum, and when they are crossed higher and diverging we have positive momentum. By simply looking for price action setups forming on the EMA levels or within their support or resistance layer, we can easily identify high-probability key levels to trade from.

Trading from event-area support and resistance levels

An event-area is a price level or zone that saw a price action signal form and then a large directional move or “event” occurs. These levels are obviously very significant and I discuss different ways to trade them in my price action trading course. But, for today’s lesson I am going to show you how to trade price action setups from event areas.

In the example chart below we have the daily XAUUSD (spot gold) chart showing about the last 4 months of data. We can see a good example here of an obvious event-area that formed through $1700.00 as price rejected this level multiple times forming well-defined pin bar strategies that subsequently set off significant directional moves. When you see an obvious price action signal that sets off a large move, you can then watch the level the price action signal formed at for future entries if price approaches it again, as these levels are obviously quite significant.

As you can see from the examples above, trading does not have to be complicated; you can learn to analyze the market and trade effectively by simply gaining knowledge of how to identify key market levels and price action setups. When we combine these two components we get a very high-probability and simple trading strategy that is also flexible enough to be applied to the ever-changing conditions we see in the Forex market each week.

We cover all the key market levels in the major Forex pairs in our daily members’ commentary each day. These ‘key levels’ are essentially the foundation to what I teach my students in my Forex trading course and members’ materials. I believe price action trade setups have a much higher probability of working out in our favor when we look for them at these confluent key levels in the market.

Reliably Finding Strong Price Levels to Trade

The sharp price impulse means that the new market players appeared and made a decision moving market balance towards the purchase/sale. Forex breakout strategies shall estimate how «genuine» and long will be a trading signal so that the small market player could enter the market in the direction of large volumes − and to grasp the profit share from a new trend.

The main thing in these trade techniques is a proper analysis of volumes and behaviour of the price which is close to the critical price levels. Even though the trading signal on an entrance normally comes latein case of the sharp breakdown, it does not prevent the experienced trader to use strong movements by using some means, both for speculative profit, and for trend trade. Any technical or fundamental factors can also serve as the catalyst of this movement.

Forex breakout strategies are considered as a classics of the stock exchange trading and continue to prove the efficiency in any market. Their main idea is in that the market moves from one point of market balance to another. If the asset price long time cannot derate, then the market constantly accumulates «trade interest», and, so there shall be a break in a certain direction as result of the market decision. The fixed imbalance between purchase/sale leads to expansion of the trade range, and in search of a new point of balance quite good opportunities for trade appear. We will consider the main types of strategy below.

What is «true» breakout

Any situation of breakdown means market reaction of players with obvious interest in purchase or in sale. Breakdown gives the trade signal allowing to enter the market in the direction of large volumes together with strong players. And if it is correct to make everything, then a part of profit from a strong trend it will be obligatory yours.

Classical definition is the following: breakout is a crossing of the strong price level (support/resistance, borders of the channel, extreme values) after which the price will more likely move in the direction of the breakout, than will return back. For breakout in the market there shall be something serious to shift the price for serious distance.

It turns out that if the price approaches power levels, then two scenarios of behavior are possible:

  • a release from the power level or a turn in the opposite direction;
  • «true» breakout of the price is fixed beyond the level and continues to move in the direction of breakout.

The more abortive attempts of breakout occur («test») including «false» breakouts, the steadier and the more significant is the specific price level, and the bigger market effort will be required for its real overcoming. Reliable breakdown requires at least 2-3 tests on the period from H1 above, and then the more visible are kickbacks, the strong is the movement towards a new movement.

In the most standard options Forex breakout strategies encompass two trade tactics for opening of positions:

  • on a «true» breakout – when the price is attached to certain levels the entrance is carried out in the direction of new movement through the market order or installation of the postponed order, for the purchase − higher than the level of possible breakout, for sale –lower than the level;
  • an entrance on a final point of kickback (on the second kickback − at least!) in the direction of possible breakdown, as a rule, through the market order.

Closing of positions is carried out traditionally – on stops, trailing stop or by more tough rules of a money management because the volumes which caused breakdown completely have not been worked out, there is a high probability of the fast kickback. Main types of breakout are shown in the graphs below, breakout after movement near the key level (called as a BASE) received the name of «Gerchik’s breakout».

The characteristics of a «true» breakout:

  • Closing of a breakout candle behind a price barrier (as it is possible further), especially strong is a situation when min/max candles also are behind level borders.
  • The distance of closing of a candle from key level shall be more than the range of average volatility for 5-7 and more periods.
  • If the price keeps behind key level within 3 and more temporary periods, then it is possible to consider that the breakdown proved to be true. For intraday and medium-term day trade by a control time span is the period usually of 2-3 hours.
  • It is necessary to watch volumes, which accompanied movement of the price to, at the moment and after breakout. If breakout is not confirmed by splash in volumes, it means that it is just a current speculation and if you did not manage to open correctly in the direction of possible breakout, it is dangerous to enter based on the market, it is necessary to wait for closing of the current candle.

What is a «false» breakout and as «to see» it

Technically breakout is considered «false» if it is a breakout at the price of some key level with subsequent fast (1-2 candles) turn in the opposite direction. As a result of the incorrect analysis, the trader opens the transaction towards breakout, but at the expense of a fast turn incurs the same fast losses.

The concept of the «false» breakout is directly connected with market psychology. This is a manifestation of a «gregarious» reflex in the market when the small players try to be in time on the leaving movement without serious analysis. As a result it turns out that they try to purchase at tops and to sell on minimum. «False» breakout is a market «trick», testing and collection of stops near the strong level. Therefore emergence of several «false» breakouts can be treated as the strong warning of the forthcoming direction of the market if the market players think in the direction opposite to the movement of the crowd.

Main types of «false» breakouts

«False» tests of the key levels begin to create long-term trends of the market. While creating strong levels of support/resistance, turning levels (Fibonacci, Murray) it is possible to draw to them the attention of small players and to wait for breakdown attempts to have an opportunity to trade against the «crowd».

Several criteria for filtering «false» breakouts:

  • The main trend and key price levels are analysed on the timeframes, which are higher than for an entrance (from H1 above). If the medium-term trend remains, and on the small period breakdown attempts are visible, then the probability of regular speculation on purpose just is high «to gobble up» market plankton which constantly opens positions at the end of strong movement. The larger is the analysis period,the more reliable is the breakout.
  • If the direction on a middle term and the direction of the current attempt of breakout are identical, then the chances of the «validity» of breakouts are much bigger.
  • Except the moment of breakout, it is necessary to analyse the candle patterns through which the breakout was performed. A «true» breakout is created by the candle with a big body and small shadows closed behind the key level. It means that the market uses the serious considerable efforts in the direction of breakout. The popular graphical patterns, such as «the Double Bottom», «Double top» or «Head Shoulders» usually have strong trade interest in the field of the necks line or the line of key points. For this reason the set of the «false» breakouts are caused by regular working off of stops according to orders of small customers. Thereafter the price comes back with the same speed.
  • All Forex breakout strategies for confirmation of breakout require that the Close price of the day candle was below the breakout level (in case of fall) and above the breakout level (with a growth).
  • If the price breaks the support level, but at the same time on the oscillator, for example, on MACD, bull divergence was created, then it is more likely a «false» break. Similarly, when the price breaks the resistance, and on the indicator of oscillator type there is bear divergence, then this break is not suitable for position opening.

Breakdown on a pattern of «PIN-bars»

If the breakdown was unsuccessful, then it is possible to earn on a kickback from strong level, but most of traders, being fond of the analysis of behaviour of the price in a breakout zone, do not notice the opportunities that give rise to forming of the well-known PIN-bar.

Pin Bar (or Pinocchio bar) is one of the strongest turning models on the periods from H1 and above. After the first side candle most of which often looks as breakout of the level the central candle with a short body and a long shadow, so-called «nose» is created. The longer is the nose, the stronger will be the expected turning movement. The general scheme of a pattern and a classical technique of its working off is set out below.

  • a «body» of no more than 20% of the size of a long shadow or in general without it;
  • a «nose» shall come to an end far beyond the border of the «eyes», and the body shall be at the level of «eyes» and close to the opposite end of bar («hammer» in case of bull trend and the «turned» hammer in case of a bear trend);
  • the PIN-bar shall not be an internal bar;
  • opening/closing of PIN-bar shall happen in the range of the «left» eye.

The PIN-bar shall be located for the subsequent successful working off:

  • near support/resistance levels;
  • strong day or week max/min;
  • Fibonacci’s levels;
  • long moving averages;
  • pivot point levels.

We open a position after closing of the «nose», best of all through the postponed BuyStop and SellStop ordersat max/min values of PIN-bar. The StopLoss level is within 3-5 points from a long shadow, a profit can be got by trailing or by partial position closing at the key levels of a pattern.

It is possible to use the special technical indicators for determination of the closest to an ideal (settings are configured!) and patterns, suitable for trade. After installation the Pinbar indicator automatically determines already created PIN-bars and highlights them by shooters of the corresponding colour and the direction.

Breakout strategy: main techniques

Classification of strategies is simple: breakout can be differentiated depending on a type of price level:

  • support/resistance levels (including «round» levels);
  • borders of channels (including dynamic);
  • max/min levels;
  • trend line;
  • volatility levels.

Even the obvious fact of break of price level isn’t a sufficient trading signal. Any type of breakout requires confirmation by other technical indicators and necessarily volume indicators.

It is always necessary to remember that in any breakout the speculative component is very high, and therefore all Forex breakout strategies, especially short-term options, impose strict requirements to a money management. Trade on breakout without installation of stop losses is strictly forbidden.

Real examples of breakout strategy can be found in network, let’s not repeat, we will be limited only to short practical recommendations.

Techniques without indicators

Techniques without indicator are set up on the basis of the analysis of graphical patterns or price designs of Price Action. These techniques are popular among the beginners, but the correct identification of graphical figures requires considerable experience, and therefore use of such techniques is rather dangerous. Moreover, such strategies are not suitable for short-term trade.

Technique on breakout of trend lines

Historically the oldest and stable system constructed on a simple logic: on a bull trend (the line on the ascending max) we look for breakout down, on bear trend (the line on the descending min) — breakout up. This technique works at a timeframe from H1 above and only at trend sites.

Breakout strategies on breakout of price levels

The strong trade impulse is usually caused either by an entrance of large players (for achievement of new price profitable levels to it) or accumulation of trade volumes at the key levels. Price levels (static or dynamic) always exist on any asset and on any period. If taking into account consider that real open interest and the postponed orders are constantly visible to marketmakers and large players, then such strategy is most often used in the speculative purposes.

Example of the medium-term trade strategy of RaminLines on breakdown of price levels

Trade asset: any currency pair. Timeframe: H1.

  • the candle is closed above blue level;
  • Stochastics is not in an oversold zone;
  • StopLoss is behind the next lower red level;
  • TakeProfit is lower than the next top red level.

We open Sell if:

  • the candle is closed below red level;
  • Stochastics is not in an oversold zone;
  • StopLoss is above the next blue level;
  • TakeProfit is higher than the next top blue level.

Technique on breakout of moving averages

Classical moving averages of SMA and EMA with the strongest settlement periods (20,50,200) from the point of view of mathematics give to the breakout the additional force – the break and fixing of the price to these levels means an exit from the range – the strongest price levels, and their breakout means an exit from a zone of average value and forming of a new tendency.

Example of trade strategy on breakout of the range

Classical set of the moving averages, with confirmation of a trading signal by means of a slow moving and the modified oscillator. Positions are open on a trend of the senior period.

Trade asset: high-volatile currency pairs. Timeframe: for an entrance – M1, for the analysis — M5. For trade the period with the greatest volatility on an asset is chosen.

  • the DSS indicator of momentum (an additional window) shows a pronounced bull trend;
  • the price leaves out the limits of the upper bound of the channel of moving averages;
  • the candle is closed above red moving average.

StopLoss is below the next local min.

We open Sell if:

  • the DSS indicator of momentum (an additional window) shows the pronounced descending trend;
  • the price leaves out of limits of the lower bound of the channel of moving averages;
  • the candle is closed below red moving average.

StopLoss is put slightly above the next local max.

Closing of the transaction: the fixed size of a profit or a trailing along red moving average.

Trade technique on a new MAX (purchase) and a new MIN (sale)

From the point of view of the technical analysis the most steady combinations of breakout of power levels and breakout of the price channel. Each extremum shows a new border: maximum price resistance level, minimum price and support level. Price levels are constantly recalculated depending on dynamics of a situation in the market. The postponed orders are usually used.

Technique on breakout of max and min of a previous period

The breakout of the day range is most often used (for example, Linda Rashke’s strategy «80-20s»), but in principle it is possible to use any period above H1. The trade is done by two postponed orders: BuyStop is 10 points higher than the previous max (+10) and SellStop is 10 points lower than last min.

Technique on breakout of price channels

The best-known long-term breakout strategy of this kind is Richard Dennis Turtles which fulfills breakout of the 4 weeks channel.

Situations of breakdown of static or dynamic trend channels are most often worked out, but trade on a release in a wide flat can be effective (various versions of channels of Donchian – on extreme values, or Bollinger ‘s Strips on averages). The analysis of retest of borders of the channel on price history is applied as a check of «validity» of breakdown. The sliding stops on a on lines of borders are usually used for dynamic channels.

Technique on breakout of volatility

This is the one of the options of a swing trade based on the forecast of the future and rather short-term impulse is enough. Practice shows that if the market moves from the previous key level for some percent, the probability of movement in a selected destination increases. The indicator of volatility (ATR type) is needed. The higher is ATR indicator, the more probable is a close turn, the less its value, the trend is weaker and the market is quieter. The entrance to purchase is carried out in case of breakout of the line of the indicator in a zone of limiting border of volatility, and an entrance to sale – in case of an exit for the lower bound.

And as the conclusion …

Breakout strategies have probability of success not above the regular average statistics, but active advertising of the fast earnings with their help makes a deceptive impression. Beginners at first should pick up an effective set of filters of «false» breakouts for the trade system, and also learn to see the operating trend on several timeframe and it is determine correctly the key levels.

The Forex breakout strategies depend on non-standard market factors, technical sliding and speed of execution of orders. All systems of breakout-kickback give trading signals with delay, and therefore the transaction can open on residual movement of the price.

Forex on breakdown the trade techniques using behavior of the price in the field of strong price levels are considered as the best as strategy. As a rule, signals after the fact of breakdown are late, but by means of some receptions it is possible «to catch» steadily the strong movements which can give not only short-term profit, but also allow to open a position at the very beginning of a trend.

Of course, for a steady profit Forex breakout strategies need volatility, but in case of the correct use of these strategies it is enough to use the popular assets of middle volatility is usually enough (the main currency pairs, crosses, raw futures). The real effect is gained in case of trade longer than for an hour, but scalpers can also use signals on breakout as estimation of the probability of a turn. Source: Dewinforex

Rare Trade Goods

Rare Trade Goods are a special class of Resource that cannot be purchased in regular Exchanges or Black Markets. They can, however, be sold in them and they will appear in the Demand screen of exchanges. Being rare, they fetch prices equal too or higher than the best regular resources. Though they are all expensive, they vary considerably in terms of their Permit Levels and Legality. Rare Trade Goods are often most easily sold in Black Markets especially those, such as Terrox Artifacts, which require a level 4 Trade Permit and have a legality of 2.

Contents

Finding Rare Trade Goods [ edit | edit source ]

Rare Trade Goods can only be produced in specific quadrants. To acquire such resources, you must gain an introduction to a Contact who resides in such a quadrant and who is apt to sell Rare Trade Goods as shown in the Contact Services list, such as Smugglers.

If a quadrant supplies a Rare Trade Good it will be listed on the bottom of the Atlas screen, below the Zones (see right). It is possible to use the Galaxy map to see the Details of each Quadrant and discover which ones will supply Rare Trade Goods. A quadrant may only supply one type and most quadrants will not supply any Rare Trade Good. The Contacts which sell Rare Trade Goods are: Gestalt Technologist, Merchant, Smuggler, Smuggler Prince and Spice Trader.

Terrox Artifacts are a special type of Rare Trade Good that can be acquired via Exploring wild zones. Be careful, as Artifact reward cards are often placed close to Xeno combat cards. Each Xeno Artifact in your hold slightly increase the chances of encountering Xeno ships in the void.

Buying and Selling Rare Trade Goods [ edit | edit source ]

There are a number of special rules for buying and selling Rare Trade Goods as well. A contact must have at least 20 influence with their faction in order to sell Rare Trade Goods. This is important because purchasing Rare Trade Goods from a Contact will cost them influence, potentially limiting their ability to sell them in the future.

Selling Rare Trade Goods has a chance to give Influence to all Contacts of the same faction in the Rare Trade Good’s Quadrant of origin. The Captain will also gain Reputation with the local faction for selling Rare Trade Goods at the Exchange. Both the Influence and Reputation bonuses are increased the farther the sale is occuring from the Rare Trade Good’s Quadrant of origin.

Lore around Rare Trade Goods [ edit | edit source ]

At this time, RTGs don’t have in-game descriptions. Thus, for now, the community will stash those details here!

Iridlaentine [ edit | edit source ]

Iridlaentine is an extremely rare metal that was mined in the Galactic Core centuries ago. This crystalline metallic element mined from the surface of certain stars. This mining was performed by Star Traders, using Leviathan Suits for their original purpose. The refinement of Iridlaentine into a usable form requires a star forge, and following the Exodus it has been extremely hard to mine and refine. The Templar Knights have a limited supply that they use carefully when the need arises.

How to Find the Strongest and Weakest Currencies to Trade

This week’s question comes from Mimi, who asks:

How do you choose your pairs to trade and do you consider weak/strong currencies to pair and trade? I have found that many traders get “stuck” on the same pairs, but as currency traders we surely have to look at which currencies are weak/strong.

The only way we make money as currency traders is to find and exploit the strengths and weaknesses of one currency versus another.

Everything is relative, so the greater the divergence is between the two currencies, the more money we stand to make.

That’s the name of the game – find and trade the strongest currency against the weakest currency.

But to do that successfully, you need a quality buy or sell signal. You also need a solid plan.

Get Instant Access to the Same “New York Close” Forex Charts Used by Justin Bennett!

Otherwise, you’ll quickly find yourself buying into resistance and selling into support. And with no plan or strategy in place, you’ll drain your trading account faster than you can say Forex.

But I’ve talked about strategies and plans before. Today we’re going to focus on relative currency strength. Specifically, how to find the strongest and weakest currencies to trade.

Use Currency Crosses to Your Advantage

Currency crosses are one of the most overlooked aspects of trading Forex. Sure, they don’t offer the kind of liquidity as the majors, but when it comes to determining currency strength and weakness, they’re unparalleled.

A cross is any currency pair that does not include the US dollar. These include the EURGBP, AUDNZD, EURCAD and the EURAUD to name a few.

If you want to learn more about currency crosses, see this lesson.

Let’s assume for a moment that you’re considering shorting the EURUSD. The pair has been weak lately and looks poised to continue lower.

But a glance at the GBPUSD paints a similar picture. The pair is breaking down with no immediate support in sight.

So how do you choose which pair to short?

All things being equal, the EURGBP holds the answer. It’s going to help you determine whether the Euro has been and may continue to be weaker than the pound or vice versa.

Looking at the EURUSD and GBPUSD won’t give you that kind of insight.

Now, what do I mean by “all things being equal”?

With the example above, we aren’t concerned with technical patterns or price action signals. We also aren’t taking into account risk to reward ratios or scheduled news events.

Let’s take things one step further.

Using the same example, let’s assume the EURGBP looks relatively bearish. It’s been moving lower for a couple of months and appears to have room to continue lower.

With this new information, you decide that the Euro is the logical currency to short of the two. And I would agree with you, at least on the surface.

But here’s the deal…

We still need a valid trade setup if we’re going to short the EURUSD. Just because we’ve discovered that the Euro is likely to be weaker than the pound in the future does not justify an entry.

So you see, while this is an excellent way to determine the relative strength and weakness of non-US dollar currencies, it is not all-inclusive nor is it foolproof.

It’s merely a way to fine tune your analysis.

We can apply this same technique to crosses such as the AUDNZD, EURNZD, GBPNZD, etc.

Keep It Simple and Have a Plan

While I love talking about this subject, it can be a slippery slope if you aren’t careful.

Let’s say you see the AUDUSD and NZDUSD heading south in a hurry. You take a look at the AUDNZD, and it too is plummeting.

Based on what we just discussed, you decide that the AUDUSD has more downside potential than its counterpart, the NZDUSD.

So you head over to your trading platform and sell the AUDUSD, hoping to capitalize on the apparent divergence.

But here’s the thing…

Where is support? Was there a valid sell signal? Where is your stop loss? What would negate the setup? Is there any scheduled event risk for the Aussie?

If these questions are left unanswered, you’ve just committed a Forex sin – you chased the market.

Worse yet, you chased the AUDUSD without the presence of a quality sell signal or a solid plan in place.

So you see, taking this notion of strongest to weakest currency out of context can be dangerous. That’s why it’s so important to keep things simple and always have a plan.

In fact, if you are just starting out, my suggestion is to forget about this entire concept of using currency crosses. It’s great information to have and can certainly help you plan your trades, but it isn’t vital to your success.

It’s my opinion that you should only consider using this technique once you’ve built a strong foundation using key levels and price action strategies.

Final Words

The currency crosses are your key to discovering the strongest and weakest non-USD currencies.

But as useful as this technique can be, it’s important not to get bogged down by it.

A far better use of your time is to focus on things like key support and resistance, price action signals and technical patterns.

Like everything we do, keep it simple and always be sure that what you’re doing fits your style. Because it’s not about finding what works best, it’s about finding what works best for you.

Send me weekly updates about  Daily Price Action’s Q&A

Your Turn: Ask Justin Anything

I’d love for this new weekly Q&A to be successful and provide an invaluable repository of answers to common Forex questions.

To do that, I need your help.

Here’s what you can do to get involved and have your question answered in next week’s post:

  1. Ask questions. Post them in the comments below or Tweet them to me @JustinBennettFX
  2. Help me answer questions. If I missed something or if you have something to add, don’t hesitate to leave a comment below.

Leave a Comment:

40 comments

CAN A TRADER WITH INITIAL CAPITAL OF 500 DOLLARS TRADE ON DAILY TIME FRAME SUCCESSFULLY. WHAT COULD LIKELY BE THE TRADER STOP LOSS AND PROFIT TAKEN VALUES.

Thanks for the question. I’ve added it to the list for next week. Cheers.

Which time-frame is best to mark up Support& Resistance for day trading please

Thanks for the question. However, I don’t day trade, so I’m probably the wrong guy to ask.

Use Currency Crosses to Your Advantage: great article and thought provoking.
To step back though, and I’m sure you have answered this in the past, what is your process to find the preferred pair to trade in any one session? Do you rely on news releases to move the market? Your input will be appre\ciated as I find this a real challenge each day to recogniose the best pairs to watch and have on my watchlist. Due to my location I am only able (capable) of trading the London session as I find little movement if there is no news in Asia session. The US session is too late for me. Your thoughts will be appreciated

I don’t trade based on sessions. I use the 4-hour and daily time frames. As such, I look for moves that can last a few days or even weeks. This site is filled with posts on the kind of price action I look for.

Can you recommend a reliable Forex Broker?

Jordi, email me and I’ll share my thoughts.

I need to know which reliable forex broker that you can recommend for me . Thank you .

great explained sir..it surely helps to be well planned and double check before we enter a trade…sir i have humble request to you to routinely update gbp/jpy and eur/jpy pairs as its play from last few months looks to be volatile and could be fruitful if approached with well setups..and i admire your way of setups…it could be a blessings to many who have lost there way in trading..GOD BLESS

Jakin, I only comment on favorable price action, so I’m not going to agree to include the same pairs every day.

Thank so much, I’ve learnt from you. Here is my question: I learnt some brokers do trade against their clients expecially doing a big news hour, maybe they are not geniue or not a registered one. How do we know if a particular broker is well registered and reliable to trade with. Because their is some controversy on the broker am currently trading with.
Many thanks

My pleasure, Moshood. Thanks for the question. I’ve added it to the list for future posts.

please ass me aswell

Hi, Thanks for this lesson. To complement this lesson I simply use the currency strenght meter from Oanda (https://www.oanda.com/forex-trading/analysis/currency-heatmap) to determ the strenght of a currency, Saves a lot of time and tributes to avoid analysis/paralysis.

Marcel, thanks for sharing. One thing I will say is that no tool will ever be as useful or comprehensive as the analysis that you perform yourself. That’s why I always suggest that traders learn to perform their own analysis rather than rely on third-party indicators or tools.

Thanks for your lessons Justin. Would you be so kind to discuss the various sell and buy signals that you frequently or commonly look out for when trading. Especially after identifying support and resistance.

Kendrick, you’re welcome. Sure, I’ll consider this for a future post. In the meantime, be sure to browse the lessons on this site. There are several posts that explain the strategies I use. https://dailypriceaction.com/free-forex-trading-lessons

HI Justin,
I was wondering, what would you advise to someone who struggling with consistency, to trade only one currency pair and focus on it, or look at the few pairs at the same time for more opportunities?
Thank you

Excellent question, Ekaterina. I’ve added it to the list for future Q&A posts. Thanks.

How true you are when commenting on the various indicators for determining weak/strong and you you hit the nail on the head, they meaningless unless you know support /resistance. I wish I had never come to buy one.At least I leanrt the correct method and your comments reinforces my findings

You’re exactly right, Michael. But hey, the best way to learn is by trial and error.

Hi Justin, I have question about playing counter trend moves. Have You got some rules for that kind trades?. What’s your criteria to decide play or not?

Hi Karol, thanks for the question. I’ve added it to the list. Cheers.

Hi Justin, what is the Elliott Wave and does it work as part of price action trading or is it just another indicator?

Siboniso, I don’t use Elliott Wave, but I did write about impulsive and corrective waves here: https://dailypriceaction.com/free-forex-trading-lessons/impulsive-corrective-waves

I think its better not choosing which pair to trade but redistribute your risk according to the relative strength. On the example of EURUSD and GBPUSD, if EURGBP is down then you could put 3/4 of your position on EURUSD and 1/4 on GBPUSD for example. Also, you can use EURGBP to decide when to close your position, if EURGBP is losing bearish momentum, its time to close your positions (if there is also some technical reason for doing it).

Marco, you could do that as well. I prefer to trade each pair based on its own merits, but finding what works best for you is the key.

what forex broker are u recommending

How to get information on currency strength against each other in forex trading

How to get information on currency strength against each other in forex trading

hi justin,
thank you for this article, but may i ask, you said this

“In fact, if you are just starting out, my suggestion is to forget about this entire concept of using currency crosses. It’s great information to have and can certainly help you plan your trades, but it isn’t vital to your success.”

what do you mean by this that like me a newbie, i should not trade currency crosses and just trade on major currencies or to just not give so much attention to what you teach in this article in determining the strength and weakness of the currency?

thank you for your answer.

This is an awesome post, cant believe I just found it now, i currently use currency index to compare the strenght and weakness of pairs it has increased my winning percentage .

Thanks, Isaac. Glad you found it useful.

Please I want to ask where the money a person made in forex come from?Must a person lose Money before another person can make it

what no of indicators is recommended while analysis the market

Preferably none at all.

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