Signs Your Forex Position Is About To Be Overrun and What To Do About It
Gaps are truly a tough call with the Forex market. Reason being the forex is open 24 hours a day, 5 Aï¿½ days a week without interruption.
If you’re a trader in the forex market you really need to focus on the “intra-day” time frame of (32 minute, 64 minute candle charts) if you see gaps on these candles, take notice of their direction.
When the price is gaping in your favor that’s great. If the price is gaping contradictory to your position, you may have the first sign of a change coming, or a pattern break.
If you’re not in a position, but are planning one, take a “Break in your trading”. Here’s how it works: You see a potential entry level for the EUR/US Dollar pair, you have considered your risk, your profit objectives are marked on the chart and you are ready to hit the buy button.
Then you take a look at the intra-day trading and see gaps. Upside gaps, downside gaps, they are truly all over the place! Now all you do is just wait. Hold your order for a few minutes before you actually place your order.
This goes twofold for you day traders. If you’re feeling like you just got to get in before this thing gets too far away from you!” you need to adjust your calculations, and then take a “Break in your trading”for a few moments. Your emotions will calm and you might just find a few entries that were more optimistic thinking than high-probability. A good egg timer helps to keep you straight!
Wide Range Bar
First, you’ve got to know your true average daily range.
Second, you’ve got to calculate your entry points beforehand. If you see daily bars that exceed the average range, expect your entry target you know those.631 and 1.26 numbers to go to the full 1.26631 extension.
Shaved Head or Shaved Bottom
If the market is near your target for entry, and the 24 hour period closes at the extreme top or bottom that is an indication of strength close at the top or weakness close at the bottom. Expect to see several tail closes one after the other as price builds momentum.