Monday, March 28, 2011

Inside Weeks

A few of the pairs I watch had inside weeks with Friday's close. These were USDCAD, USDCHF, USDJPY and, by one pip on the topside, EURJPY.

Inside candles, regardless of time period, are those candles with a price range that is within the prior candle's range. They represent a congestion or consolidation period and are more meaningful when they aren't part of a larger pattern, i.e. a triangle. The reason they're less significant in a larger pattern is that they're still reflecting the lack of significant movement in that larger pattern. Various trading strategies use inside bars. I don't consider them a signal in and of themselves but they're something to be aware of, particularly regarding their high and low as potential resistance and support respectively. Obviously, it's more meaningful if these correlate with other support and resistance. For example, with EURJPY, the high is near general price resistance.

© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

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