FX TRADING SYSTEMS


extension, an 82% chance of price not reaching the 162 extension and an 87% chance of price not reaching the 179 extension.


Figure 2 - EUR/USD Upday - Downside Extension Behaviours - If the previous day closed as a upday, there is, on average, an 81% chance of price not reaching the 127 downside extension, an 90% chance of price not reaching the 162 extension and a 91% chance of price not reaching the 179 extension.


Figure 1 - EUR/USD Upday - Upside Extension Behaviours


Figure 3 - EUR/USD – Downday - Downside Extension Behaviours - If the previous day closed as a downday, there is, on average, a 64% chance of price not reaching the 127 downside extension, an 81% chance of price not reaching the 162 extension and an 87% chance of price not reaching the 179 extension.


Figure 2 - EUR/USD Upday - Downside Extension Behaviours


extensions than the 127 extension, creating a zone between the 127 and 162 extension levels that offers resistance above (below) if price presents tradeable architecture in that zone.


Clearly, the real-time context is important – central bank announcements,


news and 42 FX TRADER MAGAZINE January - March 2018


geopolitical flow. Nevertheless, the way to read this information is as follows:


Figure 1 - EUR/USD Upday - Upside Extension Behaviours - If


the previous day closed as an


upday, there is, on average across the 6-year sample, a 64% chance of price not reaching the 127 upside


Figure 4 - EUR/USD -Downday - Upside Extension Behaviours - If the previous day closed as a downday, there is, on average, an 82% chance of price not reaching the 127 upside extension, a 90% chance of price not reaching the 162 extension and an 92% chance of price not reaching the 179 extension.


Figure 5 - EUR/USD - Follow Through if 162 Extension is Broken – What this shows is that if the 162 extension is broken by


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