Taking advantage of short-term indecision
Symmetrical triangle developing in AUD, offerring short term traders an opportunity to profit by entering near the extremes. See chart for additional details.
Trade active:
The 1hr reverse H&S mentioned in the blue note above is progressing nicely towards a breakout after a weekend gap down and an opening drive by the bulls.
Trade closed: target reached:
Profit target reached and awaiting consolidation here at the upper trendline. If we get a strong enough signal and pivot we will enter short for a ride back to the bottom support level. (Weekly TF in Red above)
Comment:
Looking at the price action near the top trendline on the lower timeframes shows bulls making an attempt to push through and breakout to the upside. Even if they are successful, we will NOT seek to reenter our long position. We only buy near bottoms, not tops. If a breakout of the top TL occurs then we will wait until the TL is retested from above to confirm that it will act as support.
Comment:
Up last last night handing out treats for Halloween and slept through U.S. open, so the opportunity to enter our short position near the upper diagonal trendline was missed. If you've found yourself in the same boat do not sweat it as new opportunities present themselves on a weekly basis. Reviewing the price action illustrates my previous point of NOT seeking to reenter our long position as bulls tried to break out of the top of this resistance.
Comment:
So far this week all of our trades have been profitable. These charts are posted to give you an idea of the power behind having a well thought out trading plan along with the power of pure price action. From here on out my plans will remain private, but you are welcome to inbox me and i'll do my best to answer any questions.
Comment:
Wanted to leave you guys with an additional update after what was said to be the final update lol. AUD still progressing according to my original plan, with one major change... Bulls made an attempt at an early breakout of this structure, and as in the plan for EU, these early breakouts tend to fail and go screaming in the opposite direction like a freight train without breaks. My longer term analysis for AUD to go go bullish into 2017 is currently on hold pending this weeks price action. A close back within structure, followed by a break below this close, should see price retesting the bottom. My intuition at the moment is that bulls may not be able to rise back to the top and for price to continue through the bottom. If the 1hr closes back within the triangle, I will be entering a stop limit to enter short as price trades below this bar.
Comment:
Now we can see my reason for not shorting this without seeing price close back within structure! :) I've been away from my desk today and missed the 4hr bull breakout bar, hence did not re-enter long. I do not regret this at all. New opportunities emerge every week and we do not chase price action under any circumstances. As a fellow respected trader once told me, "It is better to be out of a trade and wishing you were in, than in a trade and wishing you were out." In my previous comment I illustrated my entry for a short position on this setup if it were to sell off. Now i will illustrate the long entry and stop postiion here as well. This is an AFTER THE FACT analysis since I personally missed the breakout bar and did not take the trade. Despite this I feel that it is worth a share for informational purposes to guide you in your own trading. This has worked for me on all currency pairs and commodities as well when the 4hr goes into consolidation. We simply wait for a breakout bar in our direction and enter as price trades above this bar. Simple, right? Illustration below. As for my next move in AUD I will continue to remain flat on this pair while waiting to see how the week ends to start planning the trade for next week. If you did catch the long continuation keep in mind that the election is this week and we still have major resistance above to clear.