Example How to Read Forex Price Movement
Let us continue the article Tips on How to Read Forex Price Movement with an example or sequence that we should do. Let say, we start the analysis by looking at TF chart 1 hour (H1) and or 15 minutes (M15) for daily trading.
Pay attention to TF H1
Usually every day will appear one or two of 3 kinds of price tendencies (trend) that is up trend (so-called bullish trend), downtrend (bearish trend) and horizontal trend (Ranging or Sideways). We should be able to determine what trends happen to TF H1.
Consider TF M15
Identify the trend in the lower TF of TF M15. Two patterns that we can specify are consolidation or reversal. The pattern of consolidation is the movement of prices after the emergence of signs of the previous trend stopped or pending. Can to continue the previous trend or turn into reversal (change direction of previous trend). While the reversal pattern shows there will be a reversal of the direction of price movement
Compare today’s movement and yesterday in TF H1
At the TF H1 chart we can see the price movement today and the previous days. For example, yesterday’s market opening price = lowest price next day = opening price today. Or the highest price to this day = yesterday’s closing price = opening price 3 days ago and so on …
So we will be able to analyze the trend of price movement today. Whether there will be trends or sideways. This will make it easier for us to analyze price movements.
Look for the highest price and the lowest price
Look for the highest price and the lowest price in a certain period in yesterday-yesterday to today. Determine the highest graph peaks and the lowest graph basins.
Use the MA Trend Indicator
If the current price is above the MA, then the price trend will rise, and if the current price is below MA, then the price trend will decrease. We recommend using 2 MA periods, one short MA and one longer for the period.
Use the Stochastic Oscillator Indicator
Using oscillator indicator means we will pay attention to indicators that move in the range 0% – 100%. We will use the concept of OBOS (OverBought and OverSold). If the indicator is below the 20% area then we call it Oversold and if it is above the 80% area then we call Overbought.
This will be related to the use of lots when position entry. Should not exceed 5% of the capital so that our trading does not interfere with our psychology, fear or worry too much when an unrealized loss occurs.