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Course Overview

Understanding EUR/USD – The King of Forex

EUR/USD is the most traded currency pair in the world, known for high liquidity and tight spreads. This guide outlines five effective strategies popular among successful traders for day trading and swing trading.

We'll cover each strategy's type, entry/exit rules, indicators, candlestick patterns, timeframes, risk management, and how to set it up on TradingView. We'll also discuss market correlations (DXY, GBP/USD, XAU/USD), the impact of news, liquidity zones, volatility timing, and when not to trade.

🎴 Key Concepts – Flip to Learn

Term
What is a PIP?
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Definition
A pip (Percentage in Point) is the smallest price move in forex. For EUR/USD, it's the 4th decimal place (0.0001). A move from 1.1000 to 1.1001 = 1 pip.
Term
What is Leverage?
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Definition
Leverage allows you to control a larger position with less capital. 100:1 leverage means $1,000 controls $100,000. Higher leverage = higher risk AND potential reward.
Term
What is Risk-Reward Ratio?
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Definition
Risk-Reward (R:R) compares potential loss to potential gain. A 1:2 R:R means risking $100 to potentially make $200. Aim for at least 1:1.5 or 1:2 on most trades.
Mean Reversion

1. Bollinger Bands & RSI Strategy

Buy oversold dips, sell overbought spikes within ranging markets. This contrarian strategy assumes price will revert to its mean when stretched to extremes.

📊 Indicators Used
Bollinger Bands (20, 2σ) RSI (14)
↗Entry (Long)
  • ✓ Price touches/drops below lower Bollinger Band
  • ✓ RSI is below 30 (oversold)
  • ✓ Bullish candlestick confirmation (hammer, engulfing)
↗Entry (Short)
  • ✓ Price reaches/exceeds upper Bollinger Band
  • ✓ RSI is above 70 (overbought)
  • ✓ Bearish candlestick (shooting star, engulfing)
↘Exit Rules
  • • Take profit at middle band (20 SMA)
  • • Exit when RSI returns to 50-60
  • • Full exit if opposite band touch occurs
⚡Stop Loss
  • • Long: Few pips below recent swing low
  • • Short: Few pips above recent swing high
  • • Never skip the stop loss!

🕯️ Key Candlestick Patterns

Hammer
Bullish at Support
Bullish Engulfing
Strong Reversal
Shooting Star
Bearish at Resistance
Bearish Engulfing
Strong Reversal

⏱️ Recommended Timeframes

5M 15M 1H 4H Daily
💡
Risk Management Tips
Aim for at least 1:1.5 or 1:2 risk-to-reward. If your stop is 10 pips, target 15-20 pips. Risk no more than 1% of account per trade. Avoid trading this strategy during major news releases.
📋 Strategy 1 Summary
Buy low, sell high within the Bollinger Bands. This contrarian strategy works when EUR/USD is ranging. Wait for dual confirmation – an extreme price band touch plus an extreme RSI. Caution: Don't counter a very strong trend without a clear reversal signal.
Trend Following

2. Moving Average Crossover & MACD

Ride the trend by catching momentum shifts. Use two MAs and MACD to confirm genuine trend changes rather than fake-outs.

📊 Indicators Used
Fast MA (20 EMA) Slow MA (50 SMA) MACD (12, 26, 9)
↗Bullish Entry
  • ✓ Fast MA (20) crosses ABOVE slow MA (50)
  • ✓ MACD line crosses above signal line
  • ✓ MACD histogram flips positive
↗Bearish Entry
  • ✓ Fast MA (20) crosses BELOW slow MA (50)
  • ✓ MACD line crosses below signal line
  • ✓ MACD histogram turns negative
↘Exit Rules
  • • MAs cross back opposite way
  • • MACD crosses against your trade
  • • Fixed R:R target (2:1) or trail stop
⚡Stop Loss
  • • Long: Below slow MA or last swing low
  • • Short: Above slow MA or last swing high
  • • Move to breakeven after +1R profit
⚠️
Watch Out for Whipsaws
In sideways/ranging markets, you'll get multiple false crossover signals. Avoid low-volatility times (Asian session lull) and skip crossovers right before major news.
📋 Strategy 2 Summary
"The trend is your friend." When the fast MA crosses the slow MA, it suggests a new trend; MACD confirmation means the move has strength. Enter in the direction of the crossover and ride the wave until the trend weakens.
Breakout

3. Support/Resistance Breakout (with Retest)

Trade the transition from consolidation to a new trend. Wait for price to break key levels with volume confirmation, ideally entering on a retest.

📊 Tools Used
Support/Resistance Lines Volume ATR (optional)
🎯 Entry Options
  • Breakout Entry: Enter when price closes beyond key level with above-average volume
  • Retest Entry: Wait for price to retest the broken level. Old resistance becomes new support
🎯 Exit Methods
  • Measured Move: Project range height from breakout point
  • Next S/R Level: Target next significant level
  • Trailing Stop: Trail 20 pips behind as price moves
🚫
Avoiding Fakeouts
Don't enter on first touch – wait for candle CLOSE beyond the level. Look for volume spike. If price immediately reverses back – exit (bull trap). Don't chase if price already moved 50+ pips past level.
📋 Strategy 3 Summary
Breakout trading is profitable when a clear range finally gives way. Identify obvious levels, wait for a decisive break with volume, and jump in – ideally on a confirming retest. Use retests and volume as your "lie detector" for breakouts.
Pullback Entry

4. Fibonacci Retracement with Stochastic

Buy the dip in uptrends, sell the rally in downtrends. Use Fibonacci levels to find where price might reverse and Stochastic to time the entry.

📊 Tools Used
Fibonacci Retracement Stochastic (14, 3, 3)

📐 Key Fibonacci Levels

🎯 Primary Levels
  • 38.2% – Shallow pullback (strong trend)
  • 50% – Medium pullback (common)
  • 61.8% – Deep pullback (golden ratio)
⚡ Stochastic Signals
  • Buy: %K falls below 20, then crosses above %D at fib level
  • Sell: %K rises above 80, then crosses below %D at fib level
💡
Golden Confluence
The best setups occur when fib levels align with other factors: a key S/R zone, a round number, or a moving average. When multiple factors converge – that's golden confluence for a high-probability trade.
📋 Strategy 4 Summary
Buying dips in uptrends and selling rallies in downtrends using fib levels and Stochastic timing. The fib gives structure ("where might price bounce?") and Stoch gives timing ("looks like it's bouncing now!"). No Fibo magic without confirmation – be patient.
Price Action

5. Key Support/Resistance & Price Action

Pure chart reading at important levels. Master the art of identifying key zones and reading candlestick behavior to trade with the "smart money."

🎯 Identifying Key Levels

📍 Level Types
  • Previous session high/low (daily, weekly)
  • Weekly/Monthly highs and lows
  • Round numbers (1.1000, 1.1100)
  • Trendline confluence zones
🧠 Smart Money Concepts
  • Liquidity Zones: Where stop-losses cluster
  • Stop Hunts: Price spikes to trigger stops, then reverses
  • Liquidity Grab: Price pokes below support, immediately reverses
⚠️
Stop Hunt Awareness
Big players often run stops at obvious levels before the real move. If a level is "too clean," expect a fakeout first. Don't place stops exactly at obvious points. Wait for the stop hunt to complete, then trade the reversal.
📋 Strategy 5 Summary
Read context and candlesticks at important levels. "If price is at X (a critical level), I'll do Y only if I see the market's hand tip via price action." By incorporating liquidity concepts and waiting for PA confirmation, you significantly increase your odds. Trade the chart, not your bias – "listen to the market."
📊

Market Correlations

Understanding how related markets affect EUR/USD

DXY Inverse

US Dollar Index – DXY up = EUR/USD down. Watch DXY for broad USD strength/weakness.

GBP/USD Positive

~95% correlation. Both share USD. If EUR/USD rallies, GBP/USD likely follows.

XAU/USD Positive*

Gold – Gold up = USD soft = EUR/USD up (usually). *Can decouple in risk-off scenarios.

💡
Correlation Cheat Sheet
DXY ↓ = Green light for EUR/USD longs
GBP/USD also bullish = Extra confirmation
Gold rising = Likely USD soft, favors EUR/USD up
📰

News & Economic Impact

Key events that move EUR/USD

🏦

Central Bank Decisions (ECB & Fed)

Interest rate changes and forward guidance. Can cause 50+ pip moves in minutes.

Impact
📊

Non-Farm Payrolls (NFP)

U.S. monthly jobs report (first Friday). Strong NFP = USD strength = EUR/USD down.

Impact
📈

Inflation Data (CPI, PCE)

High U.S. inflation = Fed hawkish = USD up. High EU inflation = ECB hawkish = EUR up.

Impact
⚠️
News Trading Warning
Major news events cause spreads to widen and slippage. Don't trade during high-impact releases. Go flat before big news, then trade after the initial spike once direction is clear.
⏰

Trading Sessions & Timing

Know when to trade and when to stay out

24-Hour EUR/USD Volatility by Session

Times shown in UTC (add 8 hours for Philippine Time)

Tokyo
London
New York
00:00 06:00 12:00 18:00 24:00
Tokyo (Low Vol)
London (High Vol)
New York (High Vol)
✅ Best Times to Trade
  • London/NY Overlap: 12:00-16:00 UTC (8PM-12MN PHT)
  • London Open: 07:00-10:00 UTC (3PM-6PM PHT)
  • NY Open: 13:00-16:00 UTC (9PM-12MN PHT)
❌ When NOT to Trade
  • Asian Session: Low volume, choppy
  • Right before major news
  • Late Friday / Holidays
✅ Pre-Trade Checklist
Checked economic calendar for today's news events
Identified key support/resistance levels on chart
Checked DXY direction (correlation filter)
Trading during active session (not Asian lull)
Determined entry, stop loss, and take profit BEFORE entering
Position size calculated (max 1-2% risk)
🧮

Trading Calculators

Essential tools for risk management

📐
Position Size Calculator

Calculate proper lot size based on your risk parameters

⚖️
Risk/Reward Calculator

Evaluate your trade's risk-to-reward ratio

✓

Knowledge Check

Test your understanding of the strategies

Strategy Quiz

1/5

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🎯

Final Thoughts

Key takeaways and next steps

Trading EUR/USD can be rewarding, but it requires patience, practice, and disciplined risk management. We've covered 5 battle-tested strategies:

1️⃣ Bollinger + RSI

Buy oversold dips, sell overbought spikes within ranges.

2️⃣ MA Crossover + MACD

Go with the flow of a new trend, confirmed by momentum.

3️⃣ S/R Breakout

Trade big moves out of consolidations, ideally on retest.

4️⃣ Fib + Stochastic

Enter trending markets on pullback at fib support/resistance.

5️⃣ Price Action

Read candlesticks at key levels – the pure skill of market reading.

🔑
Golden Rules
1. Always use stop losses – they are your seatbelt
2. Risk no more than 1-2% per trade
3. Aim for minimum 1:1.5 risk-reward ratio
4. Check correlations and news before trading
5. Trade active sessions, avoid low-liquidity periods
6. Practice on demo before risking real capital
📚 Education Over Expectation
This guide is meant to educate and give you a solid starting framework – it's not a promise of profit. Even top traders take losses and have to adapt. The goal is to stay consistent, keep learning, and keep losses small when you're wrong while maximizing good trades. Focus on the process, not just the money. Happy trading!