Summary:Using forex technical analysis, one trading tip Forex Educator Jeremy Wagner brings is to apply your breakout strategy to strong trending markets or volatile markets. Euro pairs are showing broad based weakness ahead of the ECB’s ultimatum on Monday.
Bias your trades with forex analysis
Identify a bias or trend direction based on technical analysis such as pattern identification, trend identification or using moving averages. Jeremy biases the current market toward Euro weakness. The EURJPY is showing consolidation near a support trend line. This mixture of Euro uncertainty due to ECB’s demand to Cyprus and the chart’s technical set up could offer a breakout opportunity to sell the EURJPY.
Set up your trade orders with the Donchian Channel Indicator
Wait for the market to hit your orders. The Donchian Channel Indicator helps frame the market to help you identify strategic price points to enter and exit trades. Jeremy illustrates how to use this simple indicator to frame a potential trade in the EURJPY. If entering on a Donchian Channel break, then short entries would take place near 121.62.
A trader doesn’t have to use the Donchian Channel breaks to enter a trade. Simple trend line analysis and waiting for breaks may be a method to enter. If using the trend line identified in the video, a break would occur near 122.00.
---Written by Jeremy Wagner, Head Trading Instructor, DailyFX Education
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