AUDUSD is the first commodity currency pair that we will discuss in our series on the characteristics of price action of the different major Forex currency pairs.
Some characteristics of AUDUSD
Also known simply as the “Aussie”, the AUDUSD currency pair very often trends at a very gradual pace with the price moving back and forth – often drawing a stairways alike formation on the charts. Fast and sharp one-way moves are rather uncommon and instead, the price action tends to move in a zig-zag fashion.
For example, if the trend is down AUDUSD will usually take a gradual path of making two steps down and one step up rather than just moving straight down for a prolonged period of time.
If the trend is bullish, the same tends to hold true and AUDUSD would most probably gradually move up – partially retracing many of the bullish swings along the way.
This is a powerful trading strategy that works very well during strong market trends and can offer excellent rewards.
Most importantly, due to the accuracy of the indicators used and the conditions under which they are used, this strategy enables traders to enter only the best and strongest Forex trends out of which the best trading opportunities are filtered out and considered for taking a trade. It may not generate as many trades as other strategies, but trades which are generated are with a higher degree of accuracy.
It’s easy to implement and to use this strategy. It doesn’t require expert knowledge of the markets or extensive understanding of technical analysis principles. The strategy can be applied on all currency pairs with pretty much the same performance/results. It also works well on different timeframes, but the 4-hour chart has shown the most profitable results.
On the chart below, we show a real Forex example of how this strategy based on the FxTR Improved RSI indicator and two EMAs looks on the charts:
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