Forex Strategies | Fx Breakout | Fx Scalping

If you have been forex trading or watching the forex market this week it’s been a bit unusual. I mean…price patterns and choppiness have been even more unusual than they usually are unusual. <smile!>

It may comfort you to know that what many experienced this week is normal. The markets have been trending very nicely one way or the other the past several weeks, and then this week it decided to change its ways.

Here are some quotes from some of the FXCM analysts. You can follow them at  Daily ForexStream - which is powered by Twitter! You can see by the comments that even the pro-strategists recognize that the indicators they may have been relying on for awhile are giving false signals this week.

Here are the quotes:

Quote from David Rodriguez, Strategist for DailyFx.com — “Trading Signals: Momentum2 [signal] is very close to going long the GBPUSD. But it’s somehow managed to go long and short at the worst possible prices….Needless to say, current market conditions tear strategies like Momentum2 apart. Caution urged.” 

Quote from Antonio Sousa of DailyFX.com   “Despite the rally in the EURUSD, short positions are 15% higher than yesterday as traders increase size to recover from previous losses.”

More from David Rodriguez: ==> “Traders are, unsurprisingly, buying US dollars into its recent declines. SSI has not worked as a contrarian indicator as of late. ”

==>”US Dollar: Plummeting across the board with no rhyme or reason. Market choppiness prevails. EURUSD has just popped above 1.4000 for no apparent reason. Stalled at 50.0 Fib of 4140-3890 move at 4015. Direction remains unclear.” 

==> And here is the quote of the week, from Antonio Sousa of FXCM “Trade tips: A chance to trade against the crowd just appeared in my trading screen as $EURUSD long positions jump 17% overnight. Go Short!“ 

So as you can see, it is normal to have weeks like this one. Does it mean that if you have a strategy that has been working well for you that the run is now over?  Not necessarily.  The market will likely present a whole new ball-game next week. And your preferred rules and systems may rule once again!   

So it’s not time to quit if you had a bad week.  It’s time to evalute what happened. At what point did you recognize that the market was changing? How did you handle that? Did you keep trying to use your regular strategies or did you modify them in any way to compensate?

Also, if you have access to it, tune in to the DailyFXStream.  I have been following the trader’s analysis there for well over a year now and it has really helped me to “think more like a pro”. They recently enhanced their service and it is now like you are trading with the pros sitting right next to you, doing the analysis for you and making recommendations here and there.  

And the funniest (or most ironic)  bit of all this week for me is that my preferred strategy would have given me just one trade this week for +80 pips. And it would have kept me out of the market the rest of the week. What is so funny about that?

Ha ha I think you know the answer…

It’s funny because I decided…for no clear reason… not to implement that preferred strategy this week. <smile>

But the good news is that I can already see that there are already two set-ups based on my preferred strategy for the start of next week. One in the EUR/USD and one in the AUD/USD.

So Hurray!….next week is already setting up to  be better!

- Ann Pevey - Forex Trader, Forex Blogger, and general Forex Enthusiast who has been successfully trading this price action based strategy  for just over a year now.