Effectiveness of the 200 EMA

Forexmentor.com Forex Trading Price Action

All this week, I have been focusing on the effectiveness of the 200 EMA. More specifically, I have been working with the hourly, 15 minute, 5 minute and 1 minute charts. As an example, where you see price below the 200 EMA on the top three charts, but above it on the 1 minute, you know where price is headed – down!

This is probably one of the most powerful trading strategies you can add to your arsenal. I have talked about it this week in relation to the USD/CAD pair, and have illustrated its effectiveness in the AM Review section at www.forexmentor.com over and over again.

That aside, we are still technically in an uptrend for that pair, but we need to see some further proof that a bona fide bottom is in fact in place on the daily chart. We are experiencing a lot of weakness right now, where I would have expected strength – given the extent of the credit crunch initiated by the sub-prime mess south of the 49.

See latest sample AM Review at: http://www.forexmentor.com/sampler/