From the dawn of the Civilization humans tried to predict the future events .
That tendency produced not much till this day, aside of gazillion of Soothsayers , Witches, Sorceress , Wizards and a decent number of Prophets .
Tendency did not change with The Coming of GenZ – instead Vocabulary has changed.
So now we have Gurus, Influencers , Experts ….and Kim Kardashian of course…
Those of us that got involved deeply in the Hellish World of Forex are the most prone to try to reach for that Holy Grail – Wisdom – Knowledge – Technical approach to the reality.
We all know that once we muster all the necessary skills ( included, but not limited to crystal balls, black cats and an ear or two of blind bats ) , we will See the Future move and will make a fortune overnight ( most of involved are still waiting for that night to come ).
That said , now back to our ( Forex ) reality .
Is it really possible to predict the future moves of currencies ?
Well – Yes…and No….depends what are you after…
As your Merlin The Wizard on Duty , I’ll try to fill you in with the latest ( and even usable ) technical approach to this matter.
We’ll start with The Chart ( of course ) Daily EURUSD
Moving Averages are :
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Weighted 7
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Simple 10
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Exponential 50
Trend Lines :
To understand the Trendlines fully, we are going to need quite some time explaining the subject, but right now I am going just to give you the necessary facts :
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All the trendlines shown are Historical in their nature – in past tense they are repeating all the time – same angles, same situations.
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Easiest way to find them is to draw them in the past performance and to copy/paste them on the current situation.
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They are not the Panacea ( remedy for all the diseases ) – sometimes they are holding in a tenth of a pip, sometimes it is even 3-5 pips of slide.
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Pay attention to the nature of these trendlines – there is always a parallel one.
Trendline’s Supports and Resistances
Supports :
1.06650 , 1.04950 & 1.04700
Resistances :
1.08150 , 1.08250 , 1.10500 & 1.11500
Currently in a Buy Mode – as long as we are above 1.06650 we have to treat it as Bullish.
Moving Average’s Supports and Resistances:
Supports :
None
Resistances:
1.07300, 1.07450 & 1.07650
Currently in a Sell Mode – as long as bellow 1.07650 it is Bearish
So what to do ?? Buy or Sell you ask…
Again, to keep this text short enough so you can read it and be filled with facts that you need to understand it, let’s just say that I am going to skip on Pattern’s explanation right now, and give you some facts instead:
If the rate stalls in 1.07000 area and starts to go Up again, there are Two Options :
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We reach 1.07750 and turn down again
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We Break above ( and stay above ) 1.07750 – we are most probably going to break the Resistance at 1.08150/250 and move to the Upper Channel of this chart.
And how is that the Prediction – well, not a straight forward one for sure, but one that can put you in charge of Intraday moves and allow you to trade successfully on smaller time frames like 30 min and 1h.
Smaller time frames then that ,are calling for the similar approach to the above, but using 4h and 1h charts as a base , instead of the Daily.
Pay Attention to the following :
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Cross of MA’s – Change of the trend
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Tendency for rate to change the direction each time when it moves away from the MA’s
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Tendency to test the MA’s often (7 & 10)
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EMA 50 giving you the general direction
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MA’s 7 & 10 giving you either a signal (cross over )or Re-entry (fail to cross over )
To be able to Predict the future moves, you have to play the “If” game – If this or that happens , then I do this or that.
It is a game of probability ( yet another lesson to be learned in the near future).
Based on the probability, you go light or heavy in the position, you place your stops tighter or not….
Do not lean on your gut feelings or opinions – Look at the chart, look at the trendlines and MA’s – believe what you see.
Do your math and act appropriately .
Never , ever forget to place stop losses in advance.
Do not get carried away by sharp and current moves – wait to see, and once your view is confirmed by the price action – Execute.
Do not dream of tremendous profits – take what you get – leave the rest to the Gods of the Market.
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