Using Repeating Forex Market Behavior to trade the Market


Repeating Market Behavior

Using Repeating Forex Market Behavior to trade the Market


Ways to trade the Forex Market

There are many ways Forex Traders use to trade the Forex Market. These are the 3 main ones.

  1. Some use technical analysis. Technicians (“Chartist”) use indicators and support and resistance levels based on past price action to try to predict short and long term movements in the market
  2. Others use Fundamental analysis. Fundamentalist use recent economic news and important events to estimate the value of one currency against other currencies and the direction a currency cross will trade.
  3. Trading Market behavior. Market behavior is the study of how the market reacts to certain short term events or other routine events. It uses Repeating Forex Market Behavior to trade the Market

Examples of Market Behavior techniques.

The most successful traders have studied repeating market behavior that results in reliable, repeatable, market behavior price action that can be used to trade the Forex Market successfully.

Although there are many repeating market behavior price action movements every day or every week, trading them does not require technical analysis or Fundamental analysis.

The most commonly traded one is the Weekend gap. Experienced trader keep meticulous records of the market behavior when the price open at a completely different price level on a Monday morning than it closed on the previous Friday. Most can tell you for instance that there is an 82.3% chance of the EURUSD closing the weekend Gap within 24 hours of trading. This trade only requires an immediate entry on the Monday morning using the Friday close price as a target.

That is using established market behavior to make a profit from Forex trading. No technical or fundamental analysis required.

There is also an established reaction by the US market when there a certain moves in the European market that requires an unquestioned entry in the opposite direction of the European trend. This trade has recently been automated using the PowerPunchEA.

The Bull and bear trap moves just prior to major market opening and announcement was recently mentioned – See Bull / Bear Trap price action.

There are many others such as the European open cleanout and the US market jump just prior it close etc.

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