Exploring the Forex Trading Universe
GBPUSD, H4 Chart, 06/01/13 @23:00
Pair is being moving on a RANGE for quite long. Of course that’s great news for Support/Resistance and Swing Traders because it has given and will keep giving lots of profits if traded accordingly. It reversed going upwards, 3 candlesticks ago, as ADX showed us immediately forming a “knee”. PSAR , being a lagging indicator, is still going down and hopefully will touch price soon and then turn bullish. This is the most ideal scenario because having entered LONG early, we’ll milk the trade till it’s exhausted. But if things don’t go as expected, ADX will form another “knee” or DI’s instead of getting close and cross to the bullish direction (DI+ above DI-), they may cross to the opposite direction. These will be our EXIT signals.
On the Weekly chart below, we see pair’s BIG PICTURE using the Weekly Chart. Price seems to bounce up and down from 1.60 Level which stands for a very strong Support/Resistance. Since price action tells us that we just caught a secondary bullish wave forming, PSAR has gone bullish and still stands away from candlesticks, while MACD Histogram shows bullish momentum building up and Signal Line just entered Histogram, it remains to see if Histogram will keep going up or will slope downwards.
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