AUDUSD Downward Channel April 13, 2017 , Thursday
Observation:
Price on a downward channel.
Price bounce off dynamic resistance with a bearish pinbar.
Price below 200ma.
Long upper wick means strong price rejection upward followed by red candle bar.
Analysis:
Price respects dynamic resistance has high probability it will move inside downward channel.
If price keeps creeping near dynamic resistance, expect a strong drop of price.
Conclusion:
Short with tight stop loss on the higher high tip of the wick because price may also break dynamic resistance and would move up to a bullish trend. If price breaks dynamic resistance, expect a bullish trend.
Price on a downward channel.
Price bounce off dynamic resistance with a bearish pinbar.
Price below 200ma.
Long upper wick means strong price rejection upward followed by red candle bar.
Analysis:
Price respects dynamic resistance has high probability it will move inside downward channel.
If price keeps creeping near dynamic resistance, expect a strong drop of price.
Conclusion:
Short with tight stop loss on the higher high tip of the wick because price may also break dynamic resistance and would move up to a bullish trend. If price breaks dynamic resistance, expect a bullish trend.
Comment:
Lesson learned:
Bearish pinbar, look for a retrace then as price curves down, there is your opportunity to short.
Bearish pinbar, look for a retrace then as price curves down, there is your opportunity to short.
SHORT, place tight stop loss at the wick of the previous doji + 10pips for conservative trader.