Daily Reversals for 25/11/2009

This is a new section on our blog where we will be looking for key reversals for the day.

As many of you would know by now each currency pairs have a daily market range from the open of the market. Once this range is complete whether it’s up or down, it is very likely that a reversal may occur.

One way you way profit from those reversals would be to use the Floor Traders trading Method, which is:

• 18 Exponential Moving Average
• 9 Exponential Moving Average

Once price reaches an overbought level of oversold level, this method may be use to profit from the reversal. These reversals occur 95% of the time during the US session.

Here are 2 ways you can profit from those moves applied to a 5 Minutes Time-Frame

Strategy 1

• allow a cross of the 2 EMAs
• Wait for a pullback and place a buy (if it’s in an oversold region) 3 pips above the latest high
• Place stop below the latest or most recent major swing.
• Profit taking is equal to your stop, 1:1 Risk to Reward Ratio.

Strategy 2

• Allow cross of the 2 EMAs
• Wait for pull back.
• Allow price to come in-between the 2 EMAs (preferably touching the 18 EMA).
• Take trade as soon as price opens above both EMAs.
• Stop is place below latest swing or major swing
• Profit taking is equal to your stop, 1:1 Risk to Reward Ratio.

So here are the daily reversals for 25/11/09

Best of luck

Ash Naeck