Forex Weekly Trading Strategy, Know all about Weekly Time Frame Strategy

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forex weekly open strategy

The body of the red candle completely engulfs the previous day candle. This pattern indicates the market hits bottom, and now the buyers are going for the brand new higher high. The law clearly states that an object in motion stays in motion until an external force is applied. In the same way, the market in motion tends to stay in motion rather than the reverse.

Which market is the best for ORB trading?

There are also two weekly trading strategies with good track records which can more safely be used with only the weekly time frame. We will use a technical approach using a weekly chart strategy in this example. The primary assumption is that fundamental analysis follows technical analysis before any trading rules. Forex weekly strategy represents long-term strategy where the trader keeps trading position several weeks or months. Usually, weekly forex strategy implies fundamental and technical analysis and catches significant trends. It’s important to note that profitability isn’t static; it fluctuates with market conditions.

Step Back From The Crowd & Trade Weekly Patterns

forex weekly open strategy

It is important to note that forex trading hours are different for each currency pair. For example, the EUR/USD pair is most active during the European and US trading sessions, while the AUD/USD pair is most active during the Asian and Australian trading sessions. was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.

The ORB Trading Strategy – How to Trade Opening Range Breakouts

The best chart for weekly trading would likely be the weekly chart itself. This is because weekly trading involves analyzing price action over longer periods, typically focusing on weekly price movements to identify trends, ranges, and key support and resistance levels. Trading based on the weekly chart allows traders to adopt a position trading approach, holding trades for weeks or months, rather than the shorter-term focus of daily or intraday charts. While technical analysis is crucial in weekly trading, integrating fundamental analysis complements the overall strategy. Economic events can significantly impact currency pairs on the weekly time frame, leading to substantial price movements.

Traders must strike a balance between maximizing profit potential and managing risk. Position sizing should consider the specific currency pair’s volatility, the distance to the stop-loss level, and the trader’s risk tolerance. Properly sized positions allow traders to withstand market fluctuations without jeopardizing their trading capital, fostering consistency and longevity in their trading journey. Effective risk management is paramount when implementing the forex weekly open strategy. Traders must consider stop-loss and take-profit levels based on the weekly open price and the overall market conditions. Position sizing should align with risk tolerance and account size to ensure prudent capital preservation.

Explore our Trade Together program for live streams, expert coaching and much more. Then, join our Trade Together program for where we execute the strategy in live streams. Moreover, before executing our trade, we use the volume indicator to confirm our entry. As in the example above, we can enter a position once each criterion lines up. In our case, we know the market is in an uptrend, and we are only waiting for a breakout of the high of the opening range. The AAPL chart above shows the EMA crossover, indicating a bullish trend.

forex weekly open strategy

While shorter time frames may offer more frequent trading opportunities, they often generate increased market noise and false signals. On the other hand, higher time frames, such as monthly or quarterly, may need more granularity for timely entries and exits. The weekly time frame strikes a balance between capturing substantial price moves and avoiding the distractions of intraday fluctuations.

The exit strategy can be the daily close or a local support/resistance level. A good number of traders that use the weekly chart are those who use trend-following strategies on the daily chart but feel the need to get a broader view of the market structure. They use the weekly chart to check the position of their trade setups within the broad market structure.

Either the breakout or the retest of that previous week’s high could have made a good swing trade. There are different strategies you can create around the weekly chart, as we have mentioned above. You will have to implement the best momentum trading strategy to manage your trading account. 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.

The market tried to push above first, but as it failed and then previous level of support turned to resistance, we got a good short entry in line with the weekly open level. A lot of traders spend their weekends doing market analysis, and they often come up with different ideas and price predictions for an upcoming forex weekly open strategy trading week. Also, you must remember that the ORB strategy works best in markets that have daily opening and closing times. Therefore, we can say that it is an ideal strategy for trading stocks or commodities. You also need to identify suitable stocks or futures to implement the ORB strategy effectively.

Most of the lower timeframe traders often miss these qualities; on the other hand, the higher timeframe trader possesses these qualities to trade the market successfully. In this trading strategy, we will share some tips and tricks to trade the higher timeframes successfully. Weekly highs and lows can be traded on the H4 timeframe, offering opportunities for both breakout and reversal strategies. On the other hand, if you want to use a position trading strategy, you may want to focus on the weekly and daily timeframes. In this case, you can use the weekly timeframe to get a broad view of the market structure and step down to the daily timeframe to look for your trade setups. You can do weekly trading on any chart timeframe, but it may even be easier if you can do a multi-timeframe analysis using the weekly chart and other timeframes.

This tool comes fee-free, albeit, the minimum is $500 per copy trader. In other cases, your chosen broker might charge commission in percentage terms. For example, if you are being quoted 0.2% and you stake $2,000 – you will pay a commission of $4 to enter the market. Once you have spent a reasonable amount of time practicing on a forex demo account and you feel ready to start trading with real money – make sure you create a bankroll management plan. The number of pips that the pair moves by will ultimately determine how much you make or lose. As such, it’s really important that know how forex pips work before risking any money.

However, mean reversion strategies can be applied to this currency pair, which can be interesting for… While you are in the direction of a larger market, you need to take only stochastic signals. The reverse signals from stochastic or RSI are generally used for taking profits. The candlestick pattern or other methods can confirm the stochastic or RSI signals. 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.

  1. This one really gives you an easy overview of direction for the whole month without looking at a monthly chart.
  2. The higher timeframes move slowly, so there is no chance of any noise on the higher timeframe.
  3. There is also a mobile app – should you wish to trade forex on the move.
  4. This can be done by checking the closing price of the previous trading week and the opening price of the current trading week.
  5. Backtesting stands as a vital step in validating the effectiveness of a forex weekly time frame strategy.
  6. Additionally, traders should be mindful of market gaps that may occur over the weekend, potentially impacting their positions when the market reopens.

The weekly chart’s larger time frame enhances the reliability of these patterns, making them more robust signals for traders. Interpreting these patterns effectively helps traders gauge market sentiment and confidently make informed trading choices. Marking day open and weekly open in forex is an important aspect of trading that can help traders to identify key levels of support and resistance. This can be done by identifying the opening price of the trading session or trading week and drawing a horizontal line on the chart at this level.

Embracing the weekly time frame in forex trading unveils a dynamic approach that yields valuable insights into market trends and price movements. With each candlestick representing a week’s worth of price action, the weekly time frame allows traders to grasp the broader market context. By stepping back from the noise of lower time frames, traders can better identify long-term trends and significant price levels, providing a solid foundation for strategic decision-making. Weekly candlestick patterns carry significant weight in weekly trading strategies. Recognizing popular candlestick patterns, such as Doji, Hammer, and Engulfing patterns, can offer valuable insights into potential trend reversals and continuations.

While waiting for the break in the same direction, note that we don’t simply place a buy limit on the high of the range. Instead, we wait for a full-body candle break before entering a position to avoid fakeouts. The roots of the ORB trading strategy can be traced back to the 1960s when the legendary American trader and investor Arthur Merrill pioneered its use. Next up is Libertex – a hugely popular forex and CFD trading platform that allows you to enter and exit the market without paying any spreads. This means that you can trade forex passively – as your chosen currency trader will buy and sell on your behalf.

This one is the simplest yet most important trading strategy investor’s use. The idea is just finding out the trending market and take buy entries when price action approached the support level. Conversely, the idea is the same for the sell-side; look at the selling market on a weekly chart and take sell trades every time price action hits the resistance area.