Some of you may have been confused with the price action after yesterday's US inflation report.
As explained the reason for a stronger US dollar is that traders now expect the central bank to increase the interest rates more and more to fight inflation which makes USD more attractive.
Many of you probably are searching to find the best trading setup for a situation like this.
I am talking about FOREX mainly. (We do not have any in our portfolio at this stage )
My suggestion is, do not trade big price actions on short time frames like 5 min. It is better to look at daily or at least 4H charts.
Be careful, if you look at any FOREX chart for USD pairs on 5min or 4h at this time you will see a big outstanding candle in favor of the USD but if you wait for confirmation on daily charts then you can enter the market safely.
The candle at this stage is not a spike it is mostly a big candle with no or small shadow. If you look at longer time frames and observe them for a few days depending on the next fundamental news you may see spikes with shadows. You should wait for the candle after the one with a shadow and if that is in opposite direction then open a trade. By doing this you have waited enough for the first part of the volatility and you have entered a trade safely.
Yes, you may think that you could enter at the bottom of the candle before you see the shadow or the next candle to have more profit. My suggestion is to stay safe and ignore that profit.
No comments:
Post a Comment