Before the internet, charts were drawn by hand and for that reason, old-school traders were very selective with the information they put on their charts. Charts were clean with the main focus being on price. A handful of indicators were then used to develop a bias and that all important edge.
Compare that to most modern day traders and the logic is completely the opposite. Charts are loaded with and massively over-cluttered with software tools. Most technical tools are lagging so how much of an advantage this gives traders is highly debatable especially considering how many traders fail to find consistency and success.
One of these old-school techniques that we abide by is the use of the 200SMA on the daily time frame. If price is trading above, it has a bias and we look for long opportunities. If price is trading below the 200SMA, price has a bias and we look for shorting opportunities. We do not go against this bias.
The AUDUSD is now trading below the 200SMA and so our bias has now changed from to . Price has also pulled back to retest the 200SMA as resistance, bounced off it and is now looking to create new lows with further breakouts to the downside.
Price is still, however, in an area of consolidation that dates back to 2015 and so for that reason, we will be applying a little more patience to see if this bear trend can prove itself before we allocate any risk to short trades.
The AUDUSD can trend well and so if a bear trend does establish itself, we could see some good profit on this major currency pair.
Patience needed for now.
Any comments or questions, do not hesitate to leave them below. Hit agree if you share our sentiments!