ForexactoChartStudies

Depending on which chart the consolidation is, it will affect the chart that is previous in a different way than the charts that follows. For example, if we find that a 3 hour chart is in a consolidation, the 4 hour chart could possibly be affected and begind to form its own consolidation, so you must keep looking for this possibility. However, if the consolidation on the 3 hour
chart is not strong enough, the 4 hour chart will not be affected. On the other hand, the consolidation of the 3 hour chart will affect the previous charts, such as the 1 hour, 30 minutes, 15 minutes, etc. creating in these a formation we call Oscillations. The oscillations, are sideway moves (upwards and downwards) in the charts that are below the chart with the consolidation. Let us see a chart of a pair in Oscillation:

For example if the chart A-2 is the 3 hour chart of any pair, then we can say that chart B-1 above coud be the 1 hour chart or the 30 minutes, etc of the same pair that has the consolidation in the 3 hour chart.
Looking at the chart B-1 we can clearly see that the overall movement is sideways, making sort of waves upwards and downwards. If you look at the beginning of the chart (left side) all the way to the right side, you can see it is almost at the same price level, this tells you that a consolidation is happening at a higher timeframe chart, in this case the 3 hour chart and its
making oscillations in all of the smaller timeframe charts.
This is why it is important to know what the pair is doing before you consider trading it, because you would then work your trade accordingly. Always keep in mind that Oscillations are of short term, and Trends are of long term.
To determine if a particular pair is trending or oscillating, you should always beging your chart reading by the highest time-frame, the monthly followed by the weekly and so on to the lowest. If the pair is trending, look for entry signal around the 15
minutes or 30 minutes charts; if the pair is in Consolidation, find the highest timeframe chart that clearly defines the Oscillations, to trade.

Before you begin to read the charts on a particular pair, you must first determine the direction in which the market its moving. This information is crutial in order to find an opportunity to trade successfuly.
Therefore you must find the answer to a very important question: is the pair trending or oscillating?
Currency pairs move in one of two ways, they either move in trends (upwards or downwards) or the move in oscillations (upwards and downwards but sideways). Let us see a chart of a pair that is trending:

In the photo A-1 we can see clearly that this pair is trending downwards. However, also visible are areas where the move has changed direction for short a period of time against the trend before resuming the movement in favor of the trend. These short recesses or changes of direction are known as: Consolidations.
Let us see areas of consolidations in chart A-2:

Consolidations form for different reasons, but most common are the news events; closing of positions by large investors who were in a trade in favor of the trend and when closing their trade affected the move and caused a short change in the direction; and also due to areas of Support and Resistance. The duration of a consolidation is based on the timeframe of the chart in which the consolidation appears; in a three (3) hour chart a consolidation is much shorter than in a day chart. This is to say that the larger the timeframe in a chart, the longer the consolidation will last.

Support, Resistance and Pivot are levels found in the charts, representing historical levels where each currency pairs has found difficulty crossing. These are clear "Indicators to Exercise Caution".
When a pair manages to break one or more of these levels, it is a clear indication that the move is strong enough to transcend. FOREXACTO is equipped to recieve and display these levels automatically on a daily basis. You will observe that these levels change daily in accordance with the moves each pair had the
previous day. Let us see chart C-1 with these levels:

These levels are divided by the Pivot Point, Resistance lines are above the Pivot, while the Support lines are below the Pivot. Support lines represent levels of caution when a particular pair is
moving downwards, and Resistance lines are levels of caution when a pair is moving upwards.
However, each one of these levels offer a dual funsion depending on where the particular pair is.
For example, if a particular pair is moving between two Support lines, then the line above will be considered Resistance, and the same way it will apply to a Resistance level, if a pair is moving between two Resistance lines, then the line below its considered
Support. Pivot lines are always consireded having

dual role as well; from underneath the Pivot is consider Resistance, while from above it is considered Support.
In either case these levels are very important to know, and you use them to enter a trade. Always wait for the move of a particular pair to pass the next, level (if its very close by) of Support, Resistance or Pivot to enter a trade.
These levels are also used as protection points when you enter a trade, for example if you enter a Sell on any pair, in other words the move will be heading downwards and you have a Resistance level near, you can use this level to place your Stop above it in order to give your trade that extra protection.
It is important to note that although these levels are displayed at precise prices, they are normally considered areas rather than points, normally you will find a pair reaching a Support, Resistance or Pivot and travel a few price levels higher or lower, lets take a look at chart C-2: