8/17 Analysis: High Probability, Low Risk Trade Set Up
At the London open, all currencies are pretty much flat and moving sideways. This isn’t unusual right before a major financial center open.
If we fast forward less than 5 minutes into the session, we see this:
The USD (blue line) is strong with huge momentum on the upside indicated by that almost vertical line to the far right.
The CHF (turquoise line) and EUR (pink line) is weak with huge momentum on the downside indicated by that almost vertical line to the far right.
The steeper the lines on the far right, the more momentum currently in the market and a higher probability of you getting into a profitable trade.
Now, since the EUR typically moves further than the CHF, the trade would be:
- EUR/USD SELL
The first red line indicates when the move started that corresponds with the big move on our indicator. You would have had plenty of time to identify this and enter probably half way down this price bar. But, to be conservative, if you were slow on the trigger and entered at the bottom of that bar, price still went in your favor by 26 pips.
If you were trading a breakout strategy with a 20 pip profit target, you would have hit that very quickly.
These are exactly the conditions we look for to get those high probability, low risk trade set ups.
You can watch the entire video analysis below to see 2 more profitable trade set ups from today:
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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