The Midweek Trend Review
Article Summary:Forex traders should take the time to review price action changes throughout the week. Today we will learn how to find this week’s market momentum for Forex scalpers.
Wednesday is the half-way point for this week’s Forex trading. As traders reflect on trading to date, the mid-point can be a great time to reassess current trends and review any new market developments. Reviewing trading data can be an imperative skill for scalpers to help ensure that future positions are in the direction of current market momentum for the remainder of the week.
So how can we begin our mid-week review?
Learn Forex – USDJPY Momentum
Above you will notice that a USDJPY 30 minute chart is segmented into multiple pricing blocks. This is done by drawing a verticle line on each Sunday and Wednessday on the graph. By taking this step we have now segmented our trading weel into blocks again Wednessday representing our half way point. Once these points are designated, short term Forex traders can then apply basic trend analysis skills to determine market direction.
From this point, the key is to this analysis is to see if your designated chart is making new highs or new lows for each segment. To ease in this analysis, price blocks that make new highs are marked in blue. Where as a pricing block with lower lows will be marked in red. If you find two blocks headed in the same direction, this can symbolize a strong trending currency. However, if you see a change in the color of your trading blocks, this may symbolize a change in market direction. As depicted above, we can see the shift in the USDJPY chart. During these periods traders should remain flexible and look for new trends to develop. With this in mind, now lets look at how these pricing blocks can influence future trading decisions.
Learn Forex – USDJPY Support & Resistance
Using this analysis can also be helpful to making decisions on current price action. Past highs and lows for a pricing block can become excellent points of support and resistance. In a strong downtrend like the USDJPY, price should continue to break levels of support while staying above lines of resistance. In an instance where a new high is made in a downtrend, this would mean at least a temporary change in momentum. A t this point traders should reassess the trend and begin building their next pricing block on the graph.
---Written by Walker England, Trading Instructor
To contact Walker, email@example.com. Follow me on Twitter at @WEnglandFX.
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