Hey guys,
this analysis is going to be long, but i want to explain how i view the market and i do my top down analysis.
As we can see on the left, we recently broke and closed below an important structure level (blue line) and this means we are in a downtrend. Our bias now is bearsih, and we want to be involved in a short position.
Nonetheless, we can't set a limit order there and wait for it to be triggered, this way we are going to go broke after few days.
What we can do is identify possible reversal zones and wait for price to enter and give us a reason for entry in a short direction.
As a structure trader, the two level i look for are the broke support and the last resistance; the broken support didn't give us any reason for entry and so we wait for price to enter the last resistance zone, so that we can have a very nice risk to reward in this trade.
As price enters the reversal zone (grey box) i use my trading timeframe in order to search for short opportunities (1hr and 4hr).
On the right there's the 4hr chart and we instantly set the "alert" mode ON, because we can see two long wicks that are saying us the selling pressure is there.
In addition to that, we can see the RSI divergence at the bottom signaling bull's fuel is finishing.
So we have more conditions all pointing in the same direction (down) but i want to be sure i want to wait for a candlestick pattern. That's why i'm going to short the market if and only if the actual candle will be engulfing.
This multiframe analysis allows you to have a better grasp on the market.
I hope this looong analysis helped you in someway and let you understand my trading philosophy based on structure. Reading a chart puts you a step forward.
Don't forget to ask questions below if you have any doubt.
In the meantime, i wish you a merry christmas and a pleasant holiday time.
See you in the next chart!
this analysis is going to be long, but i want to explain how i view the market and i do my top down analysis.
As we can see on the left, we recently broke and closed below an important structure level (blue line) and this means we are in a downtrend. Our bias now is bearsih, and we want to be involved in a short position.
Nonetheless, we can't set a limit order there and wait for it to be triggered, this way we are going to go broke after few days.
What we can do is identify possible reversal zones and wait for price to enter and give us a reason for entry in a short direction.
As a structure trader, the two level i look for are the broke support and the last resistance; the broken support didn't give us any reason for entry and so we wait for price to enter the last resistance zone, so that we can have a very nice risk to reward in this trade.
As price enters the reversal zone (grey box) i use my trading timeframe in order to search for short opportunities (1hr and 4hr).
On the right there's the 4hr chart and we instantly set the "alert" mode ON, because we can see two long wicks that are saying us the selling pressure is there.
In addition to that, we can see the RSI divergence at the bottom signaling bull's fuel is finishing.
So we have more conditions all pointing in the same direction (down) but i want to be sure i want to wait for a candlestick pattern. That's why i'm going to short the market if and only if the actual candle will be engulfing.
This multiframe analysis allows you to have a better grasp on the market.
I hope this looong analysis helped you in someway and let you understand my trading philosophy based on structure. Reading a chart puts you a step forward.
Don't forget to ask questions below if you have any doubt.
In the meantime, i wish you a merry christmas and a pleasant holiday time.
See you in the next chart!