There is a free Forex signal which you can create on any charting package which is extremely powerful and yet often overlooked.
What is it?
Intra week highs and lows!
Why are these such powerful signals?
Just think what is going on in the market place. Thousand of traders and institutions the world over are engaging in the Forex market buying and selling currencies at certain levels.
The highest or lowest point a currency pair reached in the course of a 24 hour period is therefore a significant level. To get past that point the next day there has to be some momentum.
Often price will come to the previous day's high or low and pull back. It may later continue in that direction but so often it stalls at this level.
For those interested in scalping this presents a free Forex signal. It is often easy to grab 5, 10 or 15 pips from the market as price stalls at the previous day's high or low, or a high or low from the day before, or 2 or 3 days before.
This is not to suggest a trader can just wild enter trades every time price approaches a previous high or low. Careful analysis is still important.
For example, does a Fibonacci calculation or a pivot point coincide with a previous high or low? Then it becomes a stronger level or support or resistance.
What is the candle formation around that level? Is there a hammer, a hanging man or doji candle indicating price exhaustion? Has price attempted to penetrate this level before and failed? If so, how many times?
These questions help the trader to analyze this free Forex signal and determine whether the level is likely to hold allowing for a high probability trade.
How To Use This Free Forex Signal
Depending on your charting software, mark each 24 hour period. Some charting packages include a demarcation option which shows each 24 hour period in a different shade vertically.
If your charting package does not have this facility it is still easy to do. Simply use the vertical line tool and put a vertical line at 12 midnight and another vertical line at the next 12 midnight.
Now identify the highest candle in that vertical section and the lowest candle and put short horizontal lines at each point. You can now see clearly the previous day's high and low.
The next day, leave the lines in place that you have already drawn, and now insert new vertical and horizontal lines for the last 24 hour period marking the high and low.
As the days progress you will ever have highs and lows marked for the last week or so.
Then you can simply remove the oldest as the days progress depending on how many days you want to show with the highs and lows.
Now when studying your charts at the beginning of each trading session, the eye can easily pick up this free Forex signal and identify key levels of support and resistance and where price has already made attempts in the last few days to break through a previous high or low.
You can now apply your other technical indicators and determine where and how you will trade.
The Simpler The Better
While there are many sophisticated technical indicators and systems in the Forex world, the simplest are often the most effective.
Just examining previous highs and lows can be a very powerful free Forex signal often overlooked by newer traders.