Journey with EUR/USD
The EUR/USD pair boasts the largest global trading volume, making it the world’s most traded currency pair. It is highly liquid and predominantly appeals to technical traders due to its adherence to technical patterns and rules. The liquidity and steady momentum make it easier for traders to enter and exit positions.
Breakouts
EUR/USD trends tend to follow technical patterns closely. Identifying the exact level for a significant breakout can be challenging but extremely rewarding when done correctly.
Zigzag and Breakout
A common method for identifying higher highs (HH) and lower lows (LL) is using zigzag or fractal indicators. While they appear similar, they function differently. The zigzag indicator is particularly useful for spotting the most significant highs and lows by filtering out minor fluctuations. However, it does come with some drawbacks, such as lagging, which might cause you to miss important levels. A good practice is to manually mark the HH and LL first, then apply the zigzag indicator and adjust the deviation to see how well it captures these points.
Manual Method
Looking at the chart above, you’ll notice marked highs and lows with trend lines and some breakouts, most of which are successful. These points are not derived from the zigzag indicator but are based on significant emotional levels that can be spotted with the naked eye. By connecting these points manually, you can create your own more accurate version of the zigzag.
Fibonacci Retracement
Once you identify these manual highs and lows, you can utilize the Fibonacci retracement tool to determine target levels and set stop losses according to your preferred risk-reward ratio. The 161.8% Fibonacci level is an ideal spot for setting profit targets and stop losses that align with your risk management strategy.
What’s Next
I’m currently documenting the next significant levels and potential breakouts for the EUR/USD pair. This is part of an experiment, but I’m also applying these strategies in my real account with limited size. I’ll continue to share insights and updates about this trading system as we progress.
The EUR/USD pair boasts the largest global trading volume, making it the world’s most traded currency pair. It is highly liquid and predominantly appeals to technical traders due to its adherence to technical patterns and rules. The liquidity and steady momentum make it easier for traders to enter and exit positions.
Breakouts
EUR/USD trends tend to follow technical patterns closely. Identifying the exact level for a significant breakout can be challenging but extremely rewarding when done correctly.
Zigzag and Breakout
A common method for identifying higher highs (HH) and lower lows (LL) is using zigzag or fractal indicators. While they appear similar, they function differently. The zigzag indicator is particularly useful for spotting the most significant highs and lows by filtering out minor fluctuations. However, it does come with some drawbacks, such as lagging, which might cause you to miss important levels. A good practice is to manually mark the HH and LL first, then apply the zigzag indicator and adjust the deviation to see how well it captures these points.
Manual Method
Looking at the chart above, you’ll notice marked highs and lows with trend lines and some breakouts, most of which are successful. These points are not derived from the zigzag indicator but are based on significant emotional levels that can be spotted with the naked eye. By connecting these points manually, you can create your own more accurate version of the zigzag.
Fibonacci Retracement
Once you identify these manual highs and lows, you can utilize the Fibonacci retracement tool to determine target levels and set stop losses according to your preferred risk-reward ratio. The 161.8% Fibonacci level is an ideal spot for setting profit targets and stop losses that align with your risk management strategy.
What’s Next
I’m currently documenting the next significant levels and potential breakouts for the EUR/USD pair. This is part of an experiment, but I’m also applying these strategies in my real account with limited size. I’ll continue to share insights and updates about this trading system as we progress.
Trade active
The pair looks ready to break out above the 1.07500 level and start a bullish trend. I'm planning to buy if it goes above 1.0750, aiming for a target of 1.08245. I haven't set a stop loss yet; I'll provide updates as needed. Let's wait for the price to move above 1.0750.