The movement of the currency pairs at
Forex market
has a direction, so called trend, which is well followed at the end,
but for the more efficient work traders should know its direction at
the beginning of the trade week.
There are several factors, forming the trend at Forex market:
1. The movement of the currency pairs on Friday at the American Exchange.
2.
The opening of Gap (price gap at the end of the previous and beginning
of the next day) at midnight on Monday (Asian trading session). The
result is that the broken resistance levels of the pairs very often
become the support levels, and the pairs, having made a start from
these levels, move in the given direction during the week.
Between
the American trading session on Monday and Asian trading session on
Friday the channel of the resistance levels' highs (on the fractals and
zigzags) determines the start point for the currency pairs, which break
the resistance upwards or downwards, and, as a rule, move in the given
direction of the trend.
The first and basic
feature of the currency pairs' behavior at Forex market is their
movement at the American exchange on Friday. This is an original
testing of the trend's strength and direction through the weekend news.
If
the issue of the negative news does not influence the bounces of the
currency pairs on Friday, this means that brokers and banks were not
ready for such surges and the movement should start on Monday.
If the currency made the sharp leap on the trend, there are two scenarios:
1.
The new wave of the trend, for example 400 points, which the currency
pairs passed for the last week, will become a first wave, and the third
wave in the same direction, which is equal at least 640 points, is by
60% longer.
2. Being at the beginning of the wave of the
middle-trend from the 4-hours chart to the daily and weekly charts, the
rollbacks are from 23% to 62%, the movement is trend-like, the new week
- the new bounce on the trend.
If at the
American trading session on Friday the currency at the market does not
start its movement, this means that brokers can not determine the trend
or moving direction for the next week, and this direction will be known
only on Monday.
From everything mentioned above
we can make a conclusion: depending on the behavior of the Elliot
waves, Friday determines the behavior of the currency for the beginning
of the next week.
1. If the potential force of
the trend is very strong and there was a jump on the trend on Friday,
then on Monday or Tuesday it can be expected the correction and
reversal, or new wave on the trend.
2. If on Friday the
currency made a bounce against the trend, then Friday movement will
turn into correction or into the first wave of the opposite trend.
3.
If the currency does not start its movement on Friday, then it can be
expected the formation of the movement on Monday or Tuesday.
One more important feature of the currency market Forex is the analysis of
Forex economic calendar
for the next week. For this purpose it is necessary to mark the events,
which can forecast the direction of the trend and all updates to it.
Besides,
there is one more peculiarity, it is necessary to pay attention to the
Gap, which appears at midnight on Monday, whether the currency pairs of
the allies are opened upwards or downwards and what the direction of
the currency pair will be after this at the Asian trading session, as a
rule the currency will move in this direction next week.
In order to earn on the market, it is necessary to understand that intraday trend does not exist by itself.
Each
trader should come to the following major conclusion: the currency
makes the most part of its movement until the news issuing and only the
minor movement is observed when the news was officially confirmed.
article source:
http://instaforex.com/weekday_trading_at_forex_market.php