Forex Trading: Spot FX vs. Futures SRO- EURO & USDX - 8 Strategic Trading Techniques Applied

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Most major currency pairs have reached their respective oversold and overbought areas as indicated by both the W%Range & the Relative Strength Index combined; where it measures the weakness and strength of its prices in a given period of time frame. This has been the norm of the market prices, thereafter an expected correction to the opposite direction shall be made. The RSI commonly known for its relative strength index as a technical tool, is quite effective, especially where a combination of divergences and convergences are created by the prices from time to time. This is where we could identify two opposing directional lines between the RSI and the prices on the chart either using any of the chart types.

The candlestick bar is the most reliable tool amongst the charting systems applied today due to its uniqueness in bar analysis and interpretation. With these alone, you are actually applying at least three-eight (3-8) technical methods of trading analysis.

And this can also be used as a signal / indicator to determine a continuing action and corrective move is expected or not after a dramatic move in the prices. However, one must be keen in looking for discrepancies in percentage change when it does, as changes in prices from each time-frame or period covered can make a big difference. A single price move or action alone can leave an overbought / oversold area open for a continuation of the price trend and not entirely a probable trend reversal or a simple price correction in the making. This is how MegaTrade101 manages its trading analysis.

The appropriate supporting technical tool that could be used to identify such specualtive action would be having a full working knowledge and understanding of the price action between the Volumes, open interest of both the Spot/Cash and financial futures.Since prices are inversely correlated in both markets proper guidance as to how such relationship can best serve one's interest in improving their own respective trading skills vital for any trading success.
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