Monday was bad too

The table below takes a look at some of the major currency pairs and crosses. It shows the ranges for the day along with the 22-day ATR. I use 22 days because it is about a month long. The "Today's %" shows the % of the ATR that today's range covers. SO for the EURUSD with a range of 67 pips and an ATR of 124 pips, this is 54% of what is average. Finally, "Pips Left" is the amount of pips left to reach the average.

As the table clearly shows, all the pairs outlined have Pips left until they reach the average range over the last month. For a pair like the USDJPY, the range is only 22 pips today. The ATR (22) is 90 pips. The 22 pips is 68 pips shy of the average. The % of the ATR is only 24%.

How can you as a trader use the information?

If you know there is room to roam, and you are looking for 22 pip range to become a 50 pips or 60 or maybe 90 pips (the average) range , that means there could be 28, 38 or even 68 pips outside an extreme (assuming we don't break then break the other way). You can try and look for bias clues in the charts.

For example, I might look at the 50% of the days range (at 124.36 for the USDJPY - see chart below). Is the current price above or below it? If below it, that might be a bearish bias clue. If above it, more bullish. I might look at the 100 and 200 bar MA. Typically, the MA are near the 50% (see blue and green lines in chart). If the price is below that might be bearish. If above more bullish. I will look at the close. Once again if price is below it, it is more bearish. If above it more bullish. For the USDJPY the close was near the low at 124.258. I might look for other patterns that are viewable by many. So in the chart below, it might be a number of swing lows of swing highs (see blue and green circles).

For the USDJPY the hints seem to favor more of a negative bias right now. We are below the midpoint, below the 100 and 200 bar MA. The current price is around the 124.318. If the price can remains below these levels, the only way is down. IF it moves back above, that would swing the momentum back higher.

WHat you are trying to do is to catch the move just right. The price can still whip around. So be prepared for that, but risk should be limited. But if you can catch the extension direction, the reward can be worthwhile.

PS....I will be giving a live course starting on Friday. A few spots still remain. To sign up (or info) go to https://education.forexlive.com/ACT