At the end of the month I like to look for long term trade entries by looking at the monthly charts. There are two specific ones that we can look for possible entries. For long term trades that can be held as long as a month to a year long. These trades are easy to manage and they don’t take much time and they can bring great profits.
The first pair that I noticed that may be ready for a long term monthly play is the Aud/Usd.
Aud/Usd 1 Month Chart * Click on the chart to learn about our premium trading service
Take a look at all those green bars on the current move upwards. There is 10 green bars in a row, what goes up must come down. Another key is that last bar on the top is a shooting star. Which indicates a change of direction could be around the corner. To make sure that the run is over we will wait until the price breaks below the low of the previous candle before we make an entry. When the price breaks below the previous candle enter short when it closes below the daily candle. The candle I have circled will be the previous soon because the new month is next week.
To be safe you could place the stop above the monthly candle and you have a high risk to reward ratio. However I don’t have a tolerance that high so I place my stop above the daily candle. This is a great trade to take because the target is around .64 around +2500 pips.
Move your stop above the high of the previous candle each month. So this trade will have to be managed once per month to adjust the stops.
I will come back and follow up this trade if I make an entry next week, I think this will be happening soon.
It is always a good idea to be aware of the upcoming news events that can impact the trade for the long term trading cycle. A great source for forex news updates is Forex Crunch, a news blog that focuses on upcoming forex news releases.
Another source for forex trading information is from the koala that studies the Eur/Usd at the GeekKnows.
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