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Nebie Question

Discussion in 'Beginners Bootcamp' started by Steven Hartwell, Feb 21, 2010.

  1. Steven Hartwell

    Steven Hartwell Private

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    If a currency pair breaks support on a hour chart and has a long bearish candle And on different time frames it has broken major support in this case what is a good PROBABILITY what will the pair do??? Will it channel and form another form of support Or should a trader anticipate a bounce? Or will it test a monthly or a previous low??? What did some of you experiance traders do??? And how would you trade this???
     
  2. Ricex

    Ricex Sergeant

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    I can't tell you how I would trade it Steve as I would need to know the pair and look at what it has been doing, resistance etc.

    Long candles in any direction signal momentum, momentum means we have at that moment a lot of players at the table. Momentum in the direction of the major trend confirms that trend, and you want to be trading with it, your probability will be higher, it is a very good indicator.

    Price action never just keeps on going down or up, it will either pause (consolidate) or retrace a little or a lot. It is the only thing in trading that you can rely on 100%. This may take minutes or days, so if you see a pair move quickly be wary of jumping in straight away, 9/10 you will get in just as momentum starts to dry up and find yourself in negative pip land and a lot of pain.

    Sorry I can't be of more help.
     
  3. Forexwatchman

    Forexwatchman Sergeant

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    The first thing I would ask is what's going on fundamentally? If this is durning peek market hours (Europe and NY sessions) and has some sort of fundamental data driving it (Unemployment data, NFP, Housing stats, etc.) and as long as the support line is a major one (meaning it has held up the currecy pair more than once after a strong downtrend occured) then you can place your biggest lot size on that trade according to your money management and relax becasue it's an important development that many other traders, big and small, are also noticing right along with you.
     

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