The USDSGD has moved lower and into the near term support level after firing off a bearish 2 bar reversal trigger signal. The bearish 2 bar reversal was formed up at the high rejecting a major daily resistance level as both charts show below;
After moving higher up and into the daily resistance level, price snapped lower to form the bearish 2 bar reversal. Take note of how price on the second candle of the 2 bar closed lower than the first candles open which is a really great sign that price has closed really bearish and is a quality 2 bar reversal.
This market is super choppy. I get a TON of questions about ranging and choppy markets and it is for good reason because these are the trickiest markets to make trades in. The most important factors are both where we make our trades from and also that we have space to make the trades into.
Looking at that first point; it is super important that the area is really clearly defined. What do I mean by that? When you are looking to trade in a range you are going to be either trading from a high or a low and not in the middle, but the support or resistance level that you hunt your trade at needs to be super clear and obvious and even more so than if you were making a trade in a trend and this is because of the choppy and tricky market type.
You need to have the powerful supply or demand order flow in your favor when you are making a trade and that is why when next making a trade in a range, make sure the area is really clearly defined.
The other factor is space. You don’t need paddocks of it, but just enough to give you room so that price can move into the next level. Just make sure price can break the high or the low of the trigger signal and you can manage your trade accordingly to your trade plan.
See the 4 hour chart below for what I mean; See how price could break the low of the 2 bar reversal and have space to move into the next area, even though price was in a range? This is what you are looking for.
Make sure you check out the trade lesson How to Make High Probability Price Action Trades in Range & Sideways Markets for more information and strategies on trading these market types.
Daily Chart – Major Daily Levels
4 Hour Chart – 2 Bar Reversal Trigger Signal
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