I recently wrote an article on an opportunity in the British Pound to demonstrate anyone can build their own system from free info on the web.
Now a big profit opportunity could be unfolding in the Japanese Yen right now and we will show you how to use the same method to take advantage.
A Great trading method that’s free
All successful trading methods are simple and easy to understand and to recap the only indicators we are using here are trend lines, stochastics and Bollinger bands.
All the information on these components of the method are free on the web as are the chart services, (we are using futuresource.com) but there are many others.
The Japanese Yen
A strong acceleration of the down trend has been in place since the June high on the weekly chart.
Now go to the daily chart and you are seeing a rally in a bear market and a nice price spike yesterday.
These reactions are normal in strong bull or bear market and are correcting the oversold position.
Now for prices to turn bearish we would view last week’s highs as first level of resistance and then the 8550 level.
Prices have taken out resistance at the middle of the Bollinger band and are running to resistance at the top of the band.
Stochastics are bullish but over bought.
The trick here is to watch a cross with bearish divergence on the stochastic.
This shows that price momentum has waned and that the long term downtrend should resume.
With this contract you need to watch the levels of resistance and the stochastic.
When the stochastic lines cross lower prices should unfold.
Resistance is clearly defined and while as with all forex trading the market can make you look stupid it’s a good risk reward trade.
The key is to wait for confirmation and not anticipate, let price action confirm prices are turning lower.
British Pound Update
The position remains the same.
Prices look to be caught in a trading range with major resistance at 19800.
On this trade a breakout above these levels indicates far higher prices.
On the other hand
A cross on the stochastic with bearish divergence could see a swing trade down to support i. e a price reaction within the major trend.
The key again is not to anticipate - let price action tell you where prices are going either up or down and then act.
This method is simply easy to use and everything is free on the net for you to use.
If you have read the theory of breakouts, standard deviation of price and understand how the stochastic indicates momentum, then you can see why the logic is soundly based.
So before you think of buying a guru’s advice or a day trading system that doesn’t work, try it on paper and see how you get on with it.
It costs nothing as I have given it to you for free and you can simply judge it for yourself.
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