6/3 Analysis: Identifying Momentum Early
There are some strong currencies (above the zero line) but none are getting stronger at the moment and the same situation is true of the weak currencies (below the zero line).
However, if we fast forward just 10 seconds you’ll see how market conditions are changing:
Now, you can see the USD (blue line) is moving steeply up and the EUR (pink line) is moving steeply down which indicates current momentum in the market.
If we fast forward just 40 seconds into the session, this is what the indicator looks like:
You can now see how steep these lines are getting indicating huge momentum in the market happening RIGHT NOW.
- EUR/USD SELL
You can see how identifying that momentum early on (just 10 seconds into the session), we are able to enter quickly and ride that momentum down. This move was 36 pips.
This indicator gives you an advantage if you want to trade a breakout strategy at the open of a financial center which is a high probability trade set up. That doesn’t mean it will always work out, the market can quickly reverse itself but the odds are in your favor that momentum this heavy will continue or at least not pull back quickly allowing you to get out with a small loss. Either way, it’s trading with probability on your side which is what professional traders do every day in the market.
Watch the entire video analysis below:
You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.
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