Daily bias (DB) is the prevailing sentiment or mood of the forex market for a currency pair during a trading day, which influences its price movement and direction.
It is the tendency of the forex market to favor a certain direction for a currency pair within a trading day, based on technical and fundamental factors.
The goal of using the daily bias strategy is to capture more profits by trading in the direction of market bias.
But to capture profit, you must first know how to identify a daily bias, right?
In today’s blog post, I will share five ways that can help you identify or spot daily bias in forex проп трейдинг and how it can benefit you:
The 200-day moving average is a long-term trend indicator that tries to show the dominant direction of the market.
If the price is trading above the 200-day moving average, the daily bias is likely to be bullish.
And if the price is trading below the 200-day moving average, the daily bias is likely to be bearish.
Trend lines and channels are graphical tools that try to connect the highs and lows of the price to form a line or a channel.
They try to show the direction and strength of the trend, as well as potential поддержкой и сопротивлением уровнях.
Note that if the price is trading within an upward trend line or channel, the daily bias is likely to be bullish, and if the price is trading within a downward trend line or channel, the DB is likely to be bearish.
Oscillators can show you when the market is likely to reverse or continue its direction.
Some common oscillators are the Relative Strength Index (RSI), the Stochastic Oscillator, and the Moving Average Convergence Divergence (MACD).
If the oscillators are showing positive or rising values, the daily bias is likely to be bullish, and if they are showing negative or falling values, the DB is likely to be bearish.
Фундаментальный анализ will expose you to economic, political, and social factors that can affect the спрос и предложение валют.
It can show the intrinsic value and the strength of a currency relative to another. Some common fundamental factors are interest rates, inflation, gross domestic product (GDP), trade balance, and consumer confidence.
When the fundamental factors are showing positive or improving data for a currency, the daily bias is likely to be bullish for that currency.
And if the fundamental factors are showing negative or worsening data for a currency, the DB is likely to be bearish for that currency.
Цена действии is the analysis of the movement and the behavior of the price itself, without using any indicators or tools.
Some common price action techniques are свечные модели, chart patterns, and breakouts.
If the price action is showing bullish or continuation patterns, such as hammer, engulfing, or flag, the daily bias is likely to be bullish.
And if it is showing bearish or reversal patterns, such as shooting star, engulfing, or head and shoulders, the DB is likely to be bearish.
Daily bias trading strategy has several benefits that make your prop trading more rewarding. Some of the benefits are:
In conclusion, daily bias can help you become a more successful forex prop trader.
By understanding and identifying the DB for a currency pair, you can align your trades with market sentiment and take advantage of the potential opportunities.
However, it is important to note that daily bias is not a guaranteed strategy. You should always use your own judgment and discretion when trading the market.