Currency daily profile is designed to give the short-term trader a grasp on the longer time frame technical outlook. So they can always keep an eye on the bigger picture while they are trading the shorter term.
It consists of five most commonly used technical indicators, three simple moving average (50, 100, 200 Days), One oscillator we are using Stochastic, and ten days average true range.
How we Identify Currency Daily Profile?
There is no real magic on this part from our reports. It only writes daily value for mentioned indicators, and it puts beside this value the implications these values represent.
Simple Moving Average
For the selected three moving average (50, 100, and 200 Days) if today’s open is below simple moving average value this means that prices should go south, of course it is completely the opposite if current day open was above this level prices should go up.
For Stochastic if today’s indicator value is less than 80 and greater than 20 this is reflects the neutral status for stochastic which tells traders that market might continue on its direction up or down. But if indicator’s value is greater than 80, this means that a possible bearish turning point is highly probable traders should deal carefully on these days buying the instrument. And if indicator’s value is less than 20, this means that a possible bullish turning point is highly probable traders should deal carefully on these days shorting the instrument.
Average True Rang
Average True Range (ATR) is a very useful indicator that measures the overall price volatility. As traders we want to know about such volatility because we need to be aware of how volatile an instrument really is so that we can place or stops accordingly.
How this is can be Useful for My Trades?
In approaching any type of financial market, whether it is stocks, bonds, futures or Forex, prudent traders and investors should try to stack the odds in their favor as much as possible. There are many ways to accomplish this. One way is to employ “confirmed rationale” before entering into any trade. This latter principle can be termed – “confluence.”
The concept of confluence within the realm of technical trading may mean different things to different traders. However, the basic idea is that multiple technical confirmations make for a stronger trade rationale – and a higher-probability trade. Confluence is more than one indication providing a basis for any given trading action. It could be any combination of two or more technical factors pointing in the same direction.
So, when having more than technical tool confirming each other. Your percentage of confidence on your positions will increase.