The Daily Edge

Ideal trend trading conditions in forex

forex trends
In today's analysis of the Forex market, what has caught my attention, is the follow-through continuation in risk appetite dynamics. To the point that the market is starting to morph into an environment that makes for some ideal conditions to trend trading. As I show in today's video analysis, there is a growing number of markets where the 4-hour and the daily time frames exhibit a clear congruence in the direction. 

Let’s get started…

Forex trends return in style

forex trends
To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.

 

In today’s analysis of the Forex market, what caught my attention, was the follow-through continuation in risk appetite dynamics. To the point that the market is starting to morph into an environment that makes for some ideal conditions to trend trading. As I show in today’s video analysis, there is a growing number of markets, where the 4-hour and the daily time frames exhibit a clear congruence in the direction.

Granted, volatility has recently been shot to pieces, but it is undeniable that we are finally starting to see well-defined directional movements when cross-checking risk-off associated currencies (USD, JPY, CHF) against the risk-on type such as the AUD, NZD, CAD. One can also include into the mix the British Pound, even if the currency has its own idiosyncratic drivers to determine the ebbs and flows going forward.

Analysis of the forex trends

In my video analysis below I use concepts such as momentum, market structures or order flow to come up with the daily outlook in the currency market. 

Economic indicators & events

Source: Forexfactory. If interested in the best ‘free of charge’ News Indicator that displays data on past and future news in the Forex market via MT4, check this YouTube video. The indicator allows you to save time and avoid mistakes.

 

Important footnotes

Market structure 

Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to this video. Fractal breakouts is at the epicentre to assist us in the analysis of chart structures.

Market momentum

In order to assess the market momentum of a particular asset, I’ve promoted the idea of using what I call the smart money tracker. The settings and the indicator can be accessed via our Discord room, where traders from all walks of life interact frequently. In this video, I go through the layout and all elements of the Discord room in great detail.

Projection targets 

The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection.

 

About the author

Ivan Delgado

Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.

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