Forex traders Top Down investing prices move up and down based on supply and demand. Traders choose to trade their money into an economy that that have a positive outlook and strong growth potential. 

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Seven steps to top and down analysis:

 

1. Monthly main range (no more than 1000 PI PS) Measure the range with arrow tool... clone and duplicate both sides in order to be prepared for downside/ upside momentum. (3 Ranges in total)

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• Add horizontal line onto arrows

• Now add the thin rectangle strip (clone and apply to other key levels)

• Add labels E.G: "Monthly key Support 1 0.79**"

 

2. Step down to weekly timeframe to plot on the 'weekly mid-range levels'

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• Use Fibonacci tool: Click from resistance (top) to support (bottom)

• Draw a horizontal line at the 50% (0.5) level. (Remove Fib afterwards

• Do this for all three monthly ranges whilst leaving these weekly key levels as they are (no horizontal strip)

• Label the weekly mid range levels E.G: "Weekly mid-range resistance 0.96* * "

• Check the moving average situation (crossed up, crossed down/ Bullish, bearish) label

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3: Step down to the daily timeframe to plot on any key levels with the rectangle strip only. Remember to use the H4 chart in alignment with the daily for doing so.

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• Use horizontal thin strip for any daily/H4 key levels - change the colour if it helps.

• If no key level can be seen, don't force it, then stick with the weekly and monthly until Price action presents one.

• Check the moving average situation (crossed up, crossed down/ Bullish, bearish) label (weekly and daily in alignment)

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4: Mark on the higher highs/ higher lows (if in uptrend) OR lower highs/ lower lows (if in downtrend) - daily/ h4 timeframe

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• Always think ahead if a new higher high/ lower low may be expected.

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5: Apply Trend-lines onto the chart for assistance and a clearer picture in terms of how the market is trending.

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• Daily and weekly major lines assist in overall direction. Be aware of the 3rd trend line touch/ bounce + the trend-line break rules (weekly and daily)

• H4 + H2 chart is for the application of counter trend lines. Apply these if possible once you have an idea of the overall trend direction. Trade the breakouts in the direction of the trend (moving average crossover and breakout work together)

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