Long Term Outlook : Downward trend
Analysis: NZDUSD started the month below pivot point "P" indicating a bearish bias. "When the market is below the pivot point "P" Floor Traders are "Sellers" and not "Buyers"." Price has now moved up to pivot point "P" closing above "P" but leaving an upper shadow. This upper shadow indicates price is rejecting higher prices. Today's red candle opened within the body of the former green candle. Should today's candle close below the low of yesterday's candle it will have formed a "Bearish Sash" candle; a two candle reversal signal. In bearish markets the maximum trading range floor traders expect to see a market move within is from pivot "R1" to pivot "S2". As can be seen price looks like it is reversing directions at pivot point "P" and in this situation floor traders would not expect price to move down to pivot "R2".
Trade Setup: I have setup a Sell Stop order at 0.62847 at the Low of the former red bearish candle. I have set a Stop Loss 10 PIP's above the High of yesterdays green candle; the first candle of the two candle Bearish Sash pattern. A 2:1 Reward to Risk ratio is setup right at pivot "S2". Sometimes price will not make it all the way down to "S2" before reversing so I will have to watch price once it gets down in the area of "S2".
I have setup this trade in my real trading account so I will be watching this trade and will report back as comments to this post as the trade continues to develop!
Analysis: NZDUSD started the month below pivot point "P" indicating a bearish bias. "When the market is below the pivot point "P" Floor Traders are "Sellers" and not "Buyers"." Price has now moved up to pivot point "P" closing above "P" but leaving an upper shadow. This upper shadow indicates price is rejecting higher prices. Today's red candle opened within the body of the former green candle. Should today's candle close below the low of yesterday's candle it will have formed a "Bearish Sash" candle; a two candle reversal signal. In bearish markets the maximum trading range floor traders expect to see a market move within is from pivot "R1" to pivot "S2". As can be seen price looks like it is reversing directions at pivot point "P" and in this situation floor traders would not expect price to move down to pivot "R2".
Trade Setup: I have setup a Sell Stop order at 0.62847 at the Low of the former red bearish candle. I have set a Stop Loss 10 PIP's above the High of yesterdays green candle; the first candle of the two candle Bearish Sash pattern. A 2:1 Reward to Risk ratio is setup right at pivot "S2". Sometimes price will not make it all the way down to "S2" before reversing so I will have to watch price once it gets down in the area of "S2".
I have setup this trade in my real trading account so I will be watching this trade and will report back as comments to this post as the trade continues to develop!