HERE IS AN EXAMPLE OF HOW I PERFORM A "TOP DOWN ANALYSIS" ON A CURRENCY PAIR
THAT I TRADE. A BIG PART OF HOW i DO MY ANALYSIS IS TO IDENTIFY IF PRICE IS IN A
TRENDING MARKET, RANGING OR CONSOLIDATION. NOW OF COURSE ON LOWER TIME FRAMES
IT WILL APPEAR DIFFERENT. I USE THE DAILY TIME FRAME AS MY 'ANCHOR ...
WHEN DOING YOUR TOP-DOWN ANALYSIS ON THE DAILY TIME FRAME.
WE TRADE WHAT WE SEE, NOT WHAT WE 'WANT TO SEE'. WE HAVE
TO IDENTIFY WHAT THE MARKET IS DOING PERTAINING TO PRICE ACTION
AND TRY TO SEE IF A HIGH-PROBABILITY PATTERN IS PRESENT, THAT
OFFERS US AN "EDGE."
Here is an example of a large M-PATTERN that just completed
on the AUD/CAD Daily Chart.
I labeled all (4) legs of the pattern.
REMEMBER DON'T ENTER SHORT ON THE ENTRY LEG
UNTIL YOU GET A HA CANDLE CHANGE AND THEN ENETER
ON THE CLOSE OF THAT CANDLE.
STOP LOSS GOES JUST ABOVE SWING HIGH
DURING TIMES OF HIGH VOLATILITY, WHICH CAN PRODUCE QUITE A BIT OF NON-TRENDING CHOP. M AND W PATTERNS CAN BE SEEN QUITE FREQUENTLY, IF YOU KNOW WHAT TO LOOK FOR.
THE FIRST LEG OF THE M OR W IS TYPICALLY A VERY STONG IMPULSE LEG, WITH LITTLE CONSOLIDATION OR PULL-BACKS. ONCE THIS INITIAL LEG ENDS, LOOK FOR A ...
Whenever entering a trade I want to know what's going on as far as price action on the Daily chart. I feel the daily chart is the most significant as far as displaying the current market sentiment. Once you identify what type of price action the daily time frame is in, then you can determine how and when you will ...
I now mainly trade (3) types of setups. Trending, Range and Pattern. This is an example of how I scan for price action that is currently in a Range. Each day I scan through about 19 Pairs that I trade and this 4-View option allows me to scan the Daily, 240M, 60M and 15M all in one glance. What's great about ...
Description of trade set-up on chart.
The idea behind this trade set-up is when you have a strong uptrend or downtrend
and you have the 50-SMA angled UP or DOWN. When price shoots up or down
penetrating the 50-SMA . . . Meaning price is going against the 50-SMA Trend, it usually
is temporary and goes back ...
Well here's one of those trades that has all the things we look for all lined up.
1. Strong downtrend with a pullback to (2) key resistance levels: 100-MA & .618 Fib Line.
2. We saw price break through the 50-MA and pinball off the 100-MA on the last major move.
3. Stochastic (which i use a a 'cycle indicator' ...
i am not a strict advanced pattern trader. Meaning if the angle/length of the X to A leg or the distance from A to C is a little greater or less than what its supposed to be to validate the pattern, ill still trade it with tight stops.
in this case once we see price meet resistance in the area of C, we can enter ...
Here is a favorite trade of mine I thought I'd share.
1. We are looking for the 50-SMA to indicate a downtrend (Angle is going down)
2. I am looking for price to break above the 50-SMA and several candles to close above making an ARC.
3. Then I want to find the high of that move which I use a Bearish ...
It doesn't look any better than this folks. All the right
ingredients here for a trend continuation play:
1. Shorting into a downtrend.
2. Price is using 20-SMA as dynamic resistance.
3. RSI up in relative overbought area.
4. Doji candle nearing completion on the hourly.
Time to SHORT. . .
NOTE: I'd put ...
I have a good feeling on this one. Overall bias/trend is DOWN on the daily chart.
Lower High, followed by multiple Lower Lows. We have a lot of things
working here for a good high probability bearish move:
1. Trading into the major prevailing trend.
2. Price has pulled back to a prior area of support and has ...
Here's a great opportunity for a low risk
decent move trade. Stop could be placed
around 118.15 area, target will be green area
so anywhere from 119.20 to 119.40 area.
Typically falling wedge will coil and SPRING
to life with a bullish move.
Lets wait and see!
Good Luck . . .
Something to keep in mind when trading currency is how other instruments are tied to currencies, such Oil and the DOW, and how these all interact. In this case you can see how a drop in the EUR/USD saw an INVERSE play on the Dollar Index Futures. Where the US Dollar index dropped and found support on the 20-SMA, ...
Nice downtrend in play here, might be looking at a pullback
to the 34-EMA area and touch of the trendline. 2 trade possibilities
#1. Buy NOW and place stops below green box area. Target
area is 1st blue area.
#2. WAIT until price touches downward trendline and is rejected
then SHORT and place stop loss ...