February 29, 2012
- in Uncategorized by schooloftrade
Day trading strategy for dollar index
Our day trading strategy for the dollar index uses multiple
timeframes this morning as we look for the best levels of support and
resistance along with the short term trend so we can make educated trading
decisions. Remember the dollar index correlation
when trading this morning.
timeframes this morning as we look for the best levels of support and
resistance along with the short term trend so we can make educated trading
decisions. Remember the dollar index correlation
when trading this morning.
The 89-range chart on the dollar index shows us much of the
same from Tuesday. We have the bullish
AB=CD pattern which appears to be the main technical pattern in play right now
considering that we are about to test the lows of the major trigger-zone at
77.840. We expect to see 77.840 hold as
major resistance, but if the dollar index breaks that support this will be a
BIG CLUE of dollar index weakness which will then lead us to assume price is
headed to the 77.330, 77.085, and then eventually later in the month of march
should test the AB=CD reversal zone at 76.500 area. We will be using this to form an opinion on
the direction of the dollar index which will help us make educated decisions
trading other markets. The 89 range
chart shows the me the big picture, the most important support and resistance levels,
but it does NOT show me the short term trend.
same from Tuesday. We have the bullish
AB=CD pattern which appears to be the main technical pattern in play right now
considering that we are about to test the lows of the major trigger-zone at
77.840. We expect to see 77.840 hold as
major resistance, but if the dollar index breaks that support this will be a
BIG CLUE of dollar index weakness which will then lead us to assume price is
headed to the 77.330, 77.085, and then eventually later in the month of march
should test the AB=CD reversal zone at 76.500 area. We will be using this to form an opinion on
the direction of the dollar index which will help us make educated decisions
trading other markets. The 89 range
chart shows the me the big picture, the most important support and resistance levels,
but it does NOT show me the short term trend.
The 13-range chart is much faster and defines (if any) the
short term trend, along with using the major levels of support and resistance we
found on the 89 range chart as the possible ‘turning points’ in the market.
short term trend, along with using the major levels of support and resistance we
found on the 89 range chart as the possible ‘turning points’ in the market.
We can see the bear price channel defined when
we zoom out on this 13 range chart, and when we zoom in on the price action we
can see the inside trading day just above the PLOD with a price wedge structure
above us which will act like a price magnet.
Notice the trigger-zone as resistance overhead which will act as a
turning point if price rises along with the top of the price wedge and the PHOD. We can see plenty of turning points above and
below us this morning with no clear short term trend so there is no directional
bias with the dollar index as of now, which can easily change so keep an eye on
the flat trigger line and new higher-highs and lower-lows.
| Dollar Index Day Trading Strategy |
