By Admiral Markets

Dear Traders,

It is critically important to know what information you should be focused on, when you are trading.

Cherry picking by definition means to “select the best or most desirable”.

In Forex terms, traders who cherry pick are taking the very best trades from all the currency pairs, rather than just a few.

I personally trade most available pairs, with a focus on every USD and YEN pair.

And the cherry picking methods I’m about to share:

…have been successful in day-trading for me…

…so they may work for you too.

Multiple time-frame trading

Most traders pick their one time-frame and almost never leave it.

Instead they simply:

1. leave their time-frame to go down to lower time-frames; to
2. find more trading opportunities; meaning
3. they are recklessly hunting for signals on time-frames that they shouldn’t be on.

If you don’t see any success with your current chosen method, why not cherry pick the best time-frame for an entry via the multiple time-frame approach?

Why not indeed.

Multiple time-frame analysis is highly advantageous.

For one thing, it helps you synchronize the market movements.

And by aligning different time-frames, we can efficiently make use of three things:

1. trend
2. momentum
3. selective entry.

Confluence

For many trend traders, having a structure point or some other pullback measurement tool can make a big difference.

Looking for a confluence will:

1. keep you out of the weak trades; and
2. ensure you only take planned trading opportunities.

You can find so many examples of using confluence in our session recap webinars and the Admiral Markets technical analysis page.

Confluence zones are cherry-picked by analyzing:

1. trend
2. support and resistance
3. patterns
4. historical buyers and sellers
5. previous swings.

All these things can influence present and future price action.

A quick tip is::

…whenever you are not sure what to look into…

…try to cherry-pick the confluence.

Trading hours

Cherry picking the trading hours is another edge you can use use to trade the Forex market.

But remember – you need to pick the pair that is most suitable for trading, during the exact session.

I prefer to trade:

1. EUR and USD crosses during the London session; and
2. New York Session and JPY pairs during the Tokyo session.

If you are having difficulties finding options, I heartily recommend downloading Admiral Markets Supreme Edition to vastly improve your choices.

A great tip is that the best movements, can be captured during the first three hours of each major session.

Watch the equities

The JPY pairs seem to correlate strongly with equities – particularly AUD/JPY plus USD/JPY with Dax30, Nikkei and SP500 Indices.

Why?

Basically, the JPY is seen as a reserve currency and is linked to the risk-on/risk-off sentiment in volatile markets like equities.

You should look at equities each day, to see which direction they are heading.

General consensus is that if equities are:

1. bullish, you go Long on the JPY pairs mentioned above
2. bearish, you go Short on those pairs.

With equities, you must also consider:

1. whether they are at key supports or key resistance
2. the overall direction; and
3. be aware of the equities market’s open times.

Why are opening times so important?

Simple – the equity market’s open times will throw a movement into JPY pairs at the same time.

Three opening times to note are:

1. Dax – Xetra opens 09:00 CET
2. SP500/Dow Jones – NYSE opens 09:30 NYET
3. Nikkei – opens 09:00 Tokyo time.

Most importantly,

…remember that the big moves in equities usually occur in the first hour of trading…

…so watch JPY pairs extra carefully during this time.

Major news announcements

There’s numerous fundamental events that affect the short term and long term price movements.

Especially during the day.

In fact, most days there are key events that offer potential trading opportunities.

Some traders (such as myself), prefer to take trades after the news.

Very often we will see a good trend pattern, that will be reversed by a news spike.

If that happens, I use the reverse spike to get into a better price – as discussed in this video.

Be smart.

Try to cherry-pick the important event and make a trade with a better price.

Broker

You also need to cherry-pick your broker.

And in doing so, there’s several questions you should be asking.

1. What kind of client profile does the Forex broker target?
2. Does the trading software suit your expectations?
3. How efficient is the broker’s customer service?
4. Do they offer any technical and fundamental analysis or help?

The following video can help you answer these questions.

I hope this article explained what information you should cherry-pick and exploit to your advantage.

And remember that if you want to trade profitably over the long term:

…you need to do what the pros do…

…cherry-pick, apply, revise and repeat until you have what works best for you.

Cheers and safe trading,

Nenad
Article by Admiral Markets

Source: Cherry-picking Forex information

Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.