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Weekly Trading Tip: How to Trade Forex Using a Directional Bias

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As price action traders, we tend to overlook the weekly time frame. This is a huge oversight. The weekly time frame can prove to be extremely advantageous when developing a directional bias for a particular market.

Have you ever wished there was a way to easily determine a market’s bias? That is, figure out which way a market is likely to move over the next several weeks or months.

No doubt having this kind of information at your fingertips could drastically improve your trading. No more guessing whether a market’s broader sentiment is bullish or bearish.

In this lesson, we’re going to discuss how to trade Forex using the weekly chart to help identify a directional bias. Think of it as trading a pattern within a pattern. This will result in greater confidence when placing your trades.

Price Action Patterns on the Weekly Time Frame

Price action patterns on the weekly time frame can be used to form a directional bias. Patterns such as the head and shoulders, double top and even the equidistant channel can all be used to formulate a “big picture” idea of a market’s probable future direction.

Take for example EURGBP. A glance at the weekly chart shows us a descending channel that has been forming for almost six years.

Forex weekly chart showing descending channel

This not only gives us directional bias, but it also presents a future support area to watch for buyers.

From here, we can begin to drill down and look for selling opportunities on the daily and four-hour charts.

EURGBP daily forex chart

A look at the daily chart reveals a selling opportunity in the form of a wedge breakout. Now we not only have the confidence of this bearish pin bar at new resistance, but we also know that this market is in the downward leg of a broader descending channel.

By using the weekly time frame, we’re able to get a big picture look at what a particular market is doing. Combine this with price action setups on the lower time frames and you have a strong foundation for a definable edge.

Price Action Signals on the Weekly Time Frame

Just as we can use technical patterns on the weekly time frame, we can also use price action signals.

By “signals”, I’m referring to pin bars. However bullish and bearish engulfing bars can also provide clues about the probable future direction of a market.

Let’s take a look at how a weekly pin bar can indicate a possible turning point in a market.

USDJPY weekly forex chart

In the chart above, we have a bullish pin bar that formed on the USDJPY weekly chart. This pin bar formed at a previous resistance level, which is now acting as support.

This price action signal tells us that the market is likely to see higher ground in the weeks ahead. But instead of trading the weekly time frame, we can move to the daily chart and watch for bullish price action.

USDJPY daily forex chart

Here we have a bullish pin bar that formed on the USDJPY daily chart after the market was able to hold a key level. This bullish signal occurred just one week after the weekly pin bar formed in the first chart, giving us a clear signal to go long.

In fact, this bullish pin bar was discussed at length inside the members-only price action community.

Conclusion

Successfully navigating the Forex market is all about clues. The more clues you can put together about a market’s probable future direction, the better your odds of success.

The weekly time frame can be a great asset for the Forex trader if used properly. Just like the daily and four hour charts, the weekly time frame produces price action signals and patterns. These signals and patterns can be used as a guide to help steer your trades in the right direction.

So before placing your next trade, be sure to take a look at the weekly time frame, it might just be the difference between a winning trade and a losing one.

Your Turn

What are your thoughts about using the weekly time frame to develop a directional bias? Do you currently use something similar?

Leave your questions or comments below. I look forward to hearing from you.

Talk soon.

Leave a Comment:

13 comments
Adam says

Is it good to check the higher timeframes when you only trade breakout?

I thought breakouts were a sign that a new trend is forming.

Thank you

Reply
    Justin Bennett says

    Hi Adam,

    It’s always good to know what’s happening on the higher time frames regardless of the setup you’re trading.

    A breakout from a pattern such as a wedge of channel isn’t necessarily the start of a new trend, but rather a continuation of the existing trend.

    Reply
Justin Bennett says

You’re welcome, Adam.

Reply
Adenani says

EURCAD WEEKLY = bearish engulfing + pinbar?

Reply
Adenani says

I am a beginner. EURCAD WEEKLY, whether bearish engulfing + pinbar? What next … Thank you.

Reply
Simon says

Hey Justin.
After reading this i have been drawing support and resistance on weekly and go back to daily and hunt for pin bars. Man oh man they do not disappoint.. i nailed eurcad last month 19th October. still in the trade today. but its on a demo. i don’t if the gap will close but m counting on it.

Thank you Justin.

Reply
    Justin Bennett says

    Hi Simon, using the weekly time frame in this fashion is indeed powerful. It’s also overly simple, which I love.

    Thanks for the feedback. Keep up the good work.

    Reply
    Adekunle says

    Hi Simon, when you say;”go back and hunt for pin bars” does it mean you wait for pin bars to form on the already drawn weekly S/R or you hunt for pin bars that form on the lower time frame S/R, as Justin’s examples above shows

    Reply
Locan says

it makes trading easy, thanks for the knowledge.when I want to trade on a weekly time frame, can I use monthly as my reference

thanks

Reply
Mattilight says

I can’t stop thanking u bro. honestly to me, I think u have given us all it takes to succeed in this forex trading, is left for us to apply and utilize it wisely.
Thks

Reply
Sharon says

I am new to Forex and would like recommendation on learning the candles and what the different shapes and sizes means

Reply
    Justin Bennett says

    Feel free to browse the site. Just know that I only use pin bars and engulfing patterns though.

    Reply
Nyala says

Hey sir, I’m glad to b part of ur team and love to read your article. I’m improving my forex skill because of u. God bless

Reply
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