Forex Trading:-

When looking at the bigger picture we make certain conclusions of the trend and where price is likely to go.

We also try and forecast the market in advance because of those same patterns repeating.

Then we try and think in probabilities and find high probability patterns and trade them which fits in with the certain Weekly and 5-day parameters.

As day traders, our job is to find patterns which rotate towards the 50% levels and then thrust outward as the trend continues.

The current trends in forex markets are directional trends with little rotation. These patterns don't last long because eventually markets will move back into their consolidation phases.

Two weeks ago I had the view that price would rotate back towards the September 50% levels and then continue down. Instead price has just continued down.

But I'm also smart enough to understand the short-term timeframes using the 5-day pattern and adapt to the market, and continue to trade the same daily patterns of rotating and extending patterns within the 5-day range.

However in directional Monthly trends, especially in some spreads like GBP/USD as an example, those rotating patterns aren't occuring as often as some other spreads.

That's why it's imperative to monitor a number of different spreads.

Another thing which some traders find hard to grasp when looking at the bigger picture is the Weekly close and not the daily close, and you'll understand this by visualising the Weekly charts below.

The Monthly trend doesn't often close until the matching Weekly timeframe matches in the same month. Last Week's open began on the 31st August, so it won't end until Friday's close.

Therefore the levels in the market can often be different when just using the daily timeframe close.

A perfect example recently were the Index Double Monthly lows in July when using the Weekly close.

But because I personally trade as a day trader, my main focus is on trading the 5-day patterns, which mostly suit my own time zone.

Basically the set-up has to be 'perfect' :- support or resistance confirmed with a 41 pip spiral top or 'hook' pattern.

When you look at the trades below, I didn't trade each one like I do the SPI, but I still used the same set-ups and filtering techniques, which resulted in just over 380 pips gained for the week. (not including partial exits & JPY).

AUD/USD, EUR/USD, & GBP/USD Weekly Reports below