Brief Overview (Check Below for detailed individual charts for educational reasons):
I want to take a moment to organize my thoughts for you revolving around a pair I had a great trade off of a pattern a couple of weeks ago. It's important to understand the big picture as much as possible so you can make the most well informed decisions if you're ever worried about a position. To start off the picture above simply shows some major daily lines in Orange - does that reach out and speak to you on a pattern trading/price action level? It should. USDCAD in all of its wild swings has been forming a very clean cut Ascending since early 2015.
I've outlined 2 very important Horizontal supports sitting at 1.2840 and 1.3450 - the first had both historical significance as well as recent trading relevance as it served as the bottom of a reverse pattern as well as a 3rd touch on our ascending support line.
On the far right I've shown a possible/potential that could be forming, which helps add to where I am placing my targets for this trade.
Pending Buy Limit 1.3140 - Or Manual Entry as close as you can get to 1.3120
Stop Loss 1.3030 - Placed just below the most recent swing low
Take Profit 1: 1.3260 - Most Recent swing high
Take Profit 2: 1.3420 - Previous Swing high and Touch
Take Profit 3: 1.3670 - Looking for a 4th touch of the Ascending
First chart I'm going to share with you is on the 4 hour chart of the analysis I just provided:
On this chart we take a close look at the 1.3040 area and watch as it gets tested as a resistance and broken...and then further RETESTED as a new support. It doesn't just test it ONCE, but it tests it TWICE! If you were lucky enough to have recognized this set up it would have provided for an excellent LONG entry just yesterday on lower time frames.
I also draw a connecting the only 2 relevant 4 hour highs I consider for this LONG entry. The reason I am not using the 2-3 peaks in the middle is when I draw my , I want uniform and nice looking connections. I believe that the market is very precise in placement of many of these swing highs, if they weren't, our patterns/price action trading would be a garbled mess. Clearly the 4 hour candle has closed above the potential shown and we are now looking for price to come back down and retest before continuing on in a or Long direction. Standard and Simple Old Support = New Resistance and Vice Versa.
This next chart removes many elements from the 4 hour chart to avoid clutter as we expand back out to the to get the bigger picture of this trade:
The 3rd Chart remains on the daily time frame, but is in an effort to help other traders visualize what I meant when I said we have a potential in the works. The remains and in the same, much bolder orange I've outlined the intended price action and shown arrows to the to visualize the correlation.
The final chart shows our profit zones and reasons behind them.
Please do your own analysis before entering a trade. If you found this helpful or have additional questions, feel free to comment, "like" or even follow!