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The Dollar has been under
pressure recently against the major currencies and the Yen
has benefited, however its rise has been very little in
comparison with the Pound and the euro
Pull up the weekly chart
We are using
futuresource.com but you can use any of the free charting
services. The weekly trend in
the dollar against the yen is up – this is the primary trend.
Now pull up the
daily chart and add these indicators
Bollinger bands,
stochastics and RSI (If you don’t know how the above indicators work
consult our other articles)
The dollar has
dipped to the middle band of the Bollinger band and is now looking
to move higher.
Timing the move
To get the odds in
your favor you want a change in momentum and this is indicated by
the stochastic – Watch for the lines to cross and turn to the upside
with bullish divergence this then puts the odds in favour of the
bulls.
Wait for the lines
to cross and look also for a rising RSI
When the bulls take
charge support will be below Wednesdays close (on a closing basis)
and then the double bottom.
Target for the bulls
is the double top at 12000
The above is simple
way of getting into trades with the price momentum and odds on your
side and allows you to act on confirmation rather than trying to
predict.
The above trading
scenario is taking advantage of a dip in a bull market to
re-establish positions with the primary trend.
by Sacha Tarkoysky
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