31/5/ · Less Time Commitment. Weekly charts allow traders to better see the larger trend picture. They offer the added edge of being less labor-intensive than daily or intraday charts. 25/2/ · The thing I will be focusing on most is the entry, unlike on the 4 hour chart where you can just buy on an engulfing bar for example, the weekly chart will fluctuate a lot more. Again, 21/3/ · My trading system: I trade weekly charts and draw trendlines and SR Mine intends to open this thread is to discuss with you guys about the trade I am looking at. Post # 2; Trading weekly charts Hey all, Just starting to trade off the weekly charts. My assumption is that with some patience, safe lot size, and a wide stop loss it will be much easier to spot and The traders can still work in the volatile market situation. Candlestick analysis is the best tool for using any strategy in any typical condition. The weekly forex charts can assume the availability ... read more
If you want to follow the weekly timeframe forex strategy, then you should use these three indicators are as follows:. SMA or EMA — moving average indicators Oscillators such as Stochastic, RSI, MACD Trading patterns based on candle formations and shapes.
It would help if you waited for a 50 week MA to cross above weeks MA OR Bullish pattern bearish engulfing pattern or any other. Stop-loss will be reached when the price close is below the RSI trend line.
Stop-loss will be reached when the price close is above the RSI trend line. The weekly trading strategy is based on the analysis of the exponential moving average.
While you are in the direction of a larger market, you need to take only stochastic signals. You will have to ignore the bearish signals at this point.
The reverse signals from stochastic or RSI are generally used for taking profits. It is needed when the moving average surpasses the price. The candlestick pattern or other methods can confirm the stochastic or RSI signals. The weekly forex trading system is very appropriate for those traders who do not have much time to monitor the whole trading scenario, and they find the time to check the market scenario once a day.
It will also give benefits to the traders from the long-term trading. This also allows for monitoring the market trends. The traders can still work in the volatile market situation. Candlestick analysis is the best tool for using any strategy in any typical condition.
The weekly forex charts can assume the availability of sufficient funds deposited. This weekly chart can provide traders with a profitable way to achieve and gain profit.
Author Recent Posts. Trader since Currently work for several prop trading companies. So, if you pull up a weekly chart, one easy trick you can do to create the best trend indicator, is count back 13 and 26 weeks from the current weekly candlestick. Is the price now higher than it was at those times? If yes, you have a long-term uptrend. If it was lower at both, you have a long-term downtrend. If the results are mixed, you have no trend.
Forget all the fancy Forex indicators — this is a method which is both very simple and effective. So, there is a clear downtrend, and this week traders can look for short trades in this currency pair. So, there is no long-term trend, and next week traders who want to trade this currency pair should look to trade reversals at support and resistance levels.
In fact, using just a single time frame to trade Forex is usually a bad idea , whatever time frame you might pick. However, using higher time frames such as the weekly price chart, can at least tell you whether there is a long-term trend and if so, in what direction. There are several reasons why trading using the weekly time frame alone is usually a bad idea:.
It is just too long-term and slow to use on its own. While you might easily hold a good trade open on a short time frame such as 5 minutes for fifty candles, if you try holding a trade open for 50 weeks, you will encounter many problems.
Some Forex brokers impose a time limit on the duration of trades , forcing you to close an open trade after it has been open for typically a few weeks or months.
Few brokers advertise this fact- you have to check the small print or ask the broker directly to find out.. Usually, it is a charge and not a credit — the system is biased against the trader and is a way Forex brokers can make money quietly from long-term traders. Even if the fee is typically small, such as a quarter of a pip per day, if you hold a trade open for a long time these overnight swap fees add up and can really eat away at your profit. Professional traders always use a combination of long-term and short-term time frames.
Typically, professional traders will have three timeframe screens open for whatever they are trading showing the daily, hourly, and 5-minute time frame charts. Multiple time frame analysis is simply looking at two or more price charts for the same Forex currency pair or cross or other instrument, at the same time. You make a multiple time frame analysis by looking first at a higher time frame and using that chart to determine whether the price is trending and if so, in what direction or ranging, and also maybe to identify clear support and resistance levels.
It is a top-down analysis, because once you have that information from the higher time frame, you then use a lower time frame to trade from that analysis, which will usually get you more precise trade entries and exits which should maximize your reward to risk ratio.
There are a few good Forex trading strategies which have historically been profitable on the weekly time frame, outlined below. You can use a shorter time frame as a tool to trade these strategies more effectively. The results detailed below are from back tests conducted on sixteen major and minor Forex currency pairs over a very long period of almost 20 years, from to Thousands of samples were taken, increasing the statistical validity of the back test.
When a Forex currency pair or cross ended a week at its highest or lowest weekly close for 26 weeks equal to 6 months , in However, on average the next week closed against the trend by 0. If we take only the USD currency pairs from the above example, in On average, the next week closed further in the direction of the trend by 0. Although this second statistic is not encouraging, by use of a relatively tight hard stop loss, trading long-term breakouts in USD currency pairs could be made into a profitable trading strategy, but you should use a shorter time frame to make your trade entries and exits more profitable.
Next week, look for short trades on a shorter time frame such as the hourly or 4-hour time frame. This strategy and all the following strategies rely upon mean reversion. You trade mean reversion just by waiting for a turn of direction back towards the average and opening a position targeting the average. On average the next week closed with the trend by a further 0. From price patterns to how to enter and stop placement, nothing changes regardless of which time frame we use.
That applies to any chart from a 5 minute chart to a daily, weekly, monthly. Take the EURUSD for example. The EURUSD daily chart is not a great example of a clean setup. Weekly Forex Chart Going to the weekly chart, we have a better indication of what is going on with price.
I am not trading any pattern on the daily.
Many traders start out in the foreign exchange forex market by making trades based on intraday charts that measure currency price changes in five- or minute increments, or they may use daily charts that show price changes for a single trading day. Novice traders who try to use these kinds of systems often don't fare well.
Shorter-term systems require more trading skill. You may be betting against a larger overall trend without knowing it. Weekly charts are more likely to reveal these kinds of trends. Forex trading is all about trading with the trend, so a weekly trading system is likely to produce better results.
It's about using indicators on a weekly chart that can help you stay on top of the direction of momentum. You're less likely to get caught up in trading on minor shifts within the bigger trend. You'll notice that a currency pair rarely goes up and down if you take a look at any given forex chart. There's almost always some larger rising or falling trend. This larger trend is the forex version of Newton's First Law of Motion.
Objects that are in motion tend to stay in motion unless they're acted upon by some outside force. A currency that's rising in value will often have many small ups and downs along the way, but it will have them within a larger, more consistent rising trend that keeps on until some market or outside event brings it to a halt.
A winning trade involves a certain movement that doesn't guarantee but suggests that the next move will be in the same direction. Weekly charts allow traders to better see the larger trend picture.
They offer the added edge of being less labor-intensive than daily or intraday charts. Traders who use a weekly trading system can spend more time away from their monitors. Four technical indicators can be very helpful in pinning down trends and trading options in a weekly forex chart. Moving averages MA is the simplest of all the trend indicators. These charts plot the average price for a currency pair over a time frame that you select.
The MA can be simple, with just the prices added up and divided by the number of prices, or it can be a weighted MA that gives more recent prices greater importance than earlier ones. Traders may choose to show MAs for two time periods. They can buy when the MA with the shorter time frame moves above the MA with the longer one. They can sell when the MA with the shorter time frame moves below the other MA.
This indicator differs from an MA chart in that it looks at the speed and pace of price changes in a currency pair. The currency appears to have an underlying strength if the speed is rising. That will likely go on, at least until something happens that stops it.
It may be time to sell if momentum is waning. This index suggests when a currency pair may be overbought. It's due to be sold or oversold. It plots relative strength on a scale of 0 to A reading between 0 and 30 means it's oversold, while a reading of 70 to means it's overbought. Crossing the centerline at 50 from above is seen as a sell signal. Crossing it from below is seen as a buy signal.
The name of this indicator is a registered trademark of its inventor, John Bollinger. It relates to Moving Averages, but it uses a more complex process that involves standard deviations above and below a moving average price. Bollinger Bands consist of three lines.
A price move above the upper band can be a signal to sell. A price move below the lower band can be a signal to buy. It's not very common for all momentum indicators to point in the same direction on a given weekly chart. Sometimes you'll have to wait to make a trade until they look better in the aggregate. The main point is to trade small.
Be patient. Use a micro lot 1, units instead if you trade a mini lot 10, units of a currency. The price changes for trades on a weekly scale can be much greater than when you're trading over shorter time spans. Use stop-losses to limit the amount of money you're putting at risk on a given trade.
Use profit targets to set exit points for money-making trades. Fidelity Investments. CMT Association. In This Article View All. In This Article. Momentum Trading. Less Time Commitment. Trend Indicators. Trading With Multiple-Indicator Charts. Key Takeaways Following a weekly schedule tends to be more effective than a shorter-term system when you're trading on the forex market. A weekly system can help you spot the direction of forex securities so you don't react to sudden changes.
It also saves time, because you don't have to watch your laptop every day to make trading decisions. Trading slowly and small are critical for success in weekly trading on the forex market.
Note A winning trade involves a certain movement that doesn't guarantee but suggests that the next move will be in the same direction. Note The same strategies apply to the velocity of a currency pair whose price is dropping. Was this page helpful?
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21/3/ · My trading system: I trade weekly charts and draw trendlines and SR Mine intends to open this thread is to discuss with you guys about the trade I am looking at. Post # 2; The traders can still work in the volatile market situation. Candlestick analysis is the best tool for using any strategy in any typical condition. The weekly forex charts can assume the availability A video tutorial designed to teach you how to spot and trade bull and bear reversals on weekly charts. Subscribe To This Channel For More Technical Analysis & Stock Trading Ideas: 25/2/ · The thing I will be focusing on most is the entry, unlike on the 4 hour chart where you can just buy on an engulfing bar for example, the weekly chart will fluctuate a lot more. Again, 31/5/ · Less Time Commitment. Weekly charts allow traders to better see the larger trend picture. They offer the added edge of being less labor-intensive than daily or intraday charts. Trading weekly charts Hey all, Just starting to trade off the weekly charts. My assumption is that with some patience, safe lot size, and a wide stop loss it will be much easier to spot and ... read more