Today in forex trading the AUD/USD had a sell signal on our live indicators and this pair sold off. The sell signal from The Forex Heatmap® is shown below. This pair is approaching support at the 0.7650 area, we would scale out lots or exit any short term sells on this pair as the AUD/USD continues down to this price.
When the AUD/USD has strong sell signal it is always because one currency is weak and the other currency is strong. Today the AUD was mostly weak and the USD was mostly strong. This is why The Forex Heatmap® is so valuable. It works for short term buy or sell trades like today, but it also works when entering trends going up or down on the larger time frames, like the H4 and larger. The heatmap is probably the most effective tool that forex traders can have access to for trade entry management.
In the case of trading with the trend, traders can hold onto their position and continue to profit by riding the trend. But on this particular trade we would exit as it approaches the strong upport level, so this would be more of an intraday trade or daytrade. Since the AUD/USD is not trending right now, just cycling between support and resistance, we recommend good risk management and scaling out lots. Any forex trader can trade profitably using these principles and tools, parallel and inverse analysis and currency strength are vital to the success of your forex trading program.