Price action moves in three ways:
Sideways (Range)
Uptrend
Downtrend
Currently, EURUSD is in an uptrend, with price respecting the EMA as support, as visible on the chart. For newer traders, spotting these bounces can offer straightforward trading opportunities. But how do you know if the price will reverse into a downtrend or consolidate sideways? The answer lies in the EMA and market structure.
Identifying a Range
When the price enters a range, the EMA flattens and tightens, signaling consolidation. During this phase, you can trade the range like a ping-pong game, buying at support and selling at resistance. The chart shows EURUSD was range-bound for nearly two months before breaking out, confirming a new trend.
Trading the Breakout
Once the price breaks the range structure, it often signals the start of a trend. For example, a break below the range could indicate a downtrend. However, markets rarely offer perfect entries. To improve your timing:
Use lower timeframes to pinpoint entries at extreme points of the range.
Monitor the weekly open, which often acts as a key support/resistance level.
Risk management: Enter with half your planned position size initially, then add the rest once the breakout confirms.
Price Action Trading
Price action traders focus purely on the chart, ignoring news or external noise. They trade what the market shows them, staying disciplined and emotionless.
What’s your take on the EURUSD chart? Drop your thoughts or questions below, and follow for more trading setups!
Sideways (Range)
Uptrend
Downtrend
Currently, EURUSD is in an uptrend, with price respecting the EMA as support, as visible on the chart. For newer traders, spotting these bounces can offer straightforward trading opportunities. But how do you know if the price will reverse into a downtrend or consolidate sideways? The answer lies in the EMA and market structure.
Identifying a Range
When the price enters a range, the EMA flattens and tightens, signaling consolidation. During this phase, you can trade the range like a ping-pong game, buying at support and selling at resistance. The chart shows EURUSD was range-bound for nearly two months before breaking out, confirming a new trend.
Trading the Breakout
Once the price breaks the range structure, it often signals the start of a trend. For example, a break below the range could indicate a downtrend. However, markets rarely offer perfect entries. To improve your timing:
Use lower timeframes to pinpoint entries at extreme points of the range.
Monitor the weekly open, which often acts as a key support/resistance level.
Risk management: Enter with half your planned position size initially, then add the rest once the breakout confirms.
Price Action Trading
Price action traders focus purely on the chart, ignoring news or external noise. They trade what the market shows them, staying disciplined and emotionless.
What’s your take on the EURUSD chart? Drop your thoughts or questions below, and follow for more trading setups!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.