The bad news is that a predication is just a good guess…Sometimes you get it right and sometimes you get it wrong. What is price consolidation?
You need volatility good price movement in order to make money in forex trading. Most times, it is usually after the fact that traders go: That was a consolidation! And by the time those words come out of your mouth, you may have lost some of your account already! So in the same manner, by studying how price behaves and consolidations and what factors caused these consolidations in the past, we can reasonably assume that price is going to behave in the similar manner if those factors come in play again at some time in the future.
The first way to predict forex market consolidation is to identify and know the major price levels on your charts especially support and resistance levels. You know about support and resistance levels, right? When price head up to a major resistance level or a major support level, expect and anticipate the market to consolidate for a while. Just notice the major resistance level in circles. The second way to predict that the forex market may go into consolidation is when there are big events in the political or economic arena.
These days, major political events and economic news the fundamental factors happen frequently and as a result, when traders are just waiting for these event to happen, this can cause market consolidations. What Is Claimant Count? The claimant unemployment rate is the percentage change of people claiming for unemployment related benefits over the total number of full-time and part-time jobs available in the UK.
The claimant count measures the total number of people claiming for unemployment related benefits at Employment Services Office. Have you ever seen how the forex market looks like during December as it nears the holiday period? Jame Wooley wrote an article about trading during December and he seems to have put the situation in a better perspective and he wrote in part and quote:. I have been trading the forex markets for a number of years now, and in my experience December is always the hardest month of the year to make money.
So why is this? As a result, you get a lot of slow-moving markets and a lot of trading sessions that are very quiet indeed, with very little price movement at all. To verify this for yourself, you only have to apply the average true range indicator to a daily chart of any of the main forex pairs, and see how it falls during December every single year.
So if you have a profitable trading strategy in place that is able to generate consistent profits during the rest of the year, you might want to consider reducing your profit targets or making changes to your strategy during the month of December because you could easily come unstuck in this quiet trading period. I myself tend to reduce my trading activity at the start of the month, and only take on the best high probability trades on the longer time frames, before stopping altogether once we get to around 15 December.
I will then slowly get back into the swing of things during the first or second full working week of the new year. It is your jobs as a forex trader to understand that trending market structure and once you start seeing price behaving differently from that, then start to question yourself if price is heading into a consolidation or not. Then on the middle section of the chart above, you see market starts to behave differently.
It start making lower highs but not lower lows. Free Forex Trading Signals. Thanks for pointed me this post. Now i already read this post and i understand about consolidate in forex.
I like price action trading and you educated me a lot. How do you predict a forex market consolidation? Are there any ways or techniques to predict forex market consolidations or not?
Definition Of Price Consolidation What is price consolidation? You can say that the forex market is taking a rest before it continues trending. So if the market is consolidating, it is very difficult for you to trade properly because: If every trader knew when consolidation was going to start, they will all be filthy rich.
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