What do we have in this timeframe?
The market moves sideways between 4000.00 resistance and 3875.00 support levels. We have range market conditions which are confirmed by DMI - line is below the signal level and moves sideway too. lines and histogram run not far from the signal level. is at 50.00, and it tells us about the neutral market.
If we try to build trading based on the 1H timeframe, we can do it using the rules for trading in channels. It means we buy from the and sell from the based on reversal signals. Another variant is - we use a breakout signal and to join to the momentum.
Will the price break the resistance or drop below the support? Based on the 1H chart we don't know. We need to watch for the price action at these levels and act based on the exact signals.
It's possible to predict the direction of the breakout using the market conditions from the higher timeframes. I remind you that based on the 4H we have more market than , but in the long run, the market looks more than .
Does it confuse you? If yes, don't worry. We don't need to predict the direction to make a profit. We must follow the signals. If I combine all timeframes, I can make such a conclusion:
- the price should break the and move lower to the support zones. The 4H timeframe will support this movement. It will be logical for the daily upward structure too because it will be just a correction movement
- we have a possibility that the market will continue the sideways and it will require consolidation before a new upward jump. We had already a similar period, and the price moved likes this. Look at the previous consolidation and the breakout above the resistance.
Let's say we have 70% that the price breaks support and moves lower and 30% that the price breaks the resistance and moves upward. But again, we should not trade based on predictions. We must trade following the signals from the market.
Another thing I would like to pay your attention. Some of you think that if there is set up, it can be active for a long time. No, it's not always like this. Every new candle/bar could change the previous setup, a direction for trading or market conditions. Our old ideas mustn't restrict us. We must be flexible and get signals from markets to update our plans. The previous post was about the . It's a reversal pattern. But the price did not break the signal level and the market moves sideways. It means that the market is going to move in another way. The sideways movement is the part of a new market structure - and we should follow it.
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What do you think, the reasons of this upward movement? Who pushes the market upward? Share in comments.