Posted by forex at 2:45 AM
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An Abundance of Opportunities
1. Go to a real-time trading platform that has a forex data feed hooked up that can be accessed by the Internet, and pull up all the different currency pairs traded on the forex market. Begin to look for significant highs or lows, and make note of which currency pair it is.
2. Use the chart-drawing feature on the trading platform to mark a horizontal line on the currency pair at the significant high or low made in its price action. On significant lows, these areas will form the basis for support if the price should decline again and retest the area again. It's also important to know if these prior lows were accompanied by a huge spike in volume. This is usually a sign that a spike in selling took place but couldn't drive down the forex currency pair's price at this level, making it an area of major support. This presents a low-risk buying opportunity if this price low is retested.
3. Also, as you scan through the charts of the forex currency pairs, take note of any prior highs that kicked off a sharp decline. These areas will form the basis for resistance if price should rally again and retest the area again. It's also important to know if these prior highs were accompanied with a huge spike in volume. This is usually a sign that a spike in buying took place but couldn't drive up the forex currency pair's price at this level, making it an area of major resistance. This presents a low-risk selling, or shorting, opportunity, if this price high is retested.