A Piece Of the Puzzle

Saturday, February 23, 2008

By this April, I would have spend 2 years studying forex. By far this is the hardest thing to understand. Compare to a pc, I learned to assemble a pc and isntall windows in only one day, learned to install car sound system in 3 hours. Forex 2 years is like just waking up from sleep and still in bed. Thats is to compare how hard forex is. If anyone out there tells you forex is easy, then he never traded before. Btw, the title of the blog is just of SEO.

Forex is very difficult to understand. What we can do to survive is to come up with a plan. A plan is based on behaviour pattern. At certain condition, the market will behave the same way most of the time. Today I will show you a piece of a puzzle showing that forex market behave the same most of the time at certain condition. If you can anticipate its behaviour, I am sure you can make money of it.

This a 4 hour chart of Gbp/Usd. The yellow circle indicates where RSI 8 crossed below 22 or above 78. 6 out of 7 times, whenever RSI crossed the extreme level, it will retrace big enough to gain profit. Only once the price remain the same. Currently RSI is at extreme level, so a drop is expected next week. A behaviour if can be anticipated can bring profit. Use it wisely.

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