In today’s article, let’s take a look at how to trade Forex based on Hawkeye volume-based trading principles. And in particular, let’s consider the case where we missed the initial entry and are looking to enter a little later.
In Forex, we always begin with the Hawkeye Fatman indicator, which shows which currencies are relatively strong or weak with respect to all the other currencies. Below is a chart of today’s Fatman showing me that the EUR is weak and the USD is strong. Based on this setup, we know that strength cycles constantly, and usually returns to fair value or to the opposite extreme. So in our charts, we look for a probable reversal of trend direction to start our trade.
So the Fatman started to show a reversal setup around 0600, and we saw that the initial trade entry on our charts came around 0630, meaning we missed that initial entry! Bummer! What do we do?
In our Hawkeye training room, we teach students to study VOLUME, and that is where we find our answer.
On the EURUSD chart below, we see the initial entry we missed, marked by the first green up-arrow. Since we missed the initial entry, all we need to do is wait for the pull back on the volume, which signifies buying weakness. When buying strength returns, the trend continues and signals our re-entry.
As you can see, there are several more opportunities to get into this trend if you missed any of the other previous entries.
As an advanced tip, use the Hawkeye Roadkill indicator. It identifies EVERY volume pull back on a trend, compares it to the longer time volume and signals the best time to enter or re-enter the trend. It is a fabulous tool that I would not trade without. But I wanted to make sure you knew how to spot a valid re-entry by just using volume.
I teach this and many other principles in our weekly Wednesday training room. So please come along and join the action.
To learn more about volume and volume spread analysis, and to see more examples and live trade setups be sure to join me in the next free LIVE Hawkeye Demonstration Room held every Wednesday. Open to all. Click this link for more information or to join us in class.
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Hawkeye Traders, LLC