Trends going into 6/29/2022 and Healthy Trend Example
So first, let me point out the obvious in that the 12-Hour Uptrend clearly did a reversal. If you read my long-winded explanation of trend trading, I explained that the first expectation of a new trend, is to look for it to be reversing and not continuing. As I had been talking about the last two days, the 12-Hour Uptrend took hold at 3926, and never closed above it.
As of 22:30 EST, there are two healthy, yet competing, trends developing. They are the 2-Hour Downtrend, and the 4-Hour Uptrend.
As of writing this, there is some concern on the 4-Hour Uptrend formation as it closed below it's trendline of 3829, and when it got back above it didn't continue any momentum. The 4-Hour Uptrend is however supported at this time of a 3-Hour Downtrend Reversal.
The 2-Hour Downtrend formation looks healthier, as it has not closed above it's downtrend mark of 3832.
I'd expect to see a battle between this 3832 and 3824 zone, and would expect things to rally again if it crosses above 3840ish or to continue this decline if it drops below 3815ish. When these battles occur, I look to the lower timeframes for trade trend reversals, as I've explained previously.
That being said, with the Consumer Confidence coming in lower than expected today, I'm expecting a lower than expected GDP, and that will cause this dip to continue back into the 3600s, or further down, where it will remain until the next CPI data comes out.
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If you'd like to learn more about trend trading, continue reading on. I suggest any new trader learns to trend trade, as it tends to be significantly more profitable and reliable, in my opinion, than some of the more 'advanced' trade strategies that can be more complex.
I've been trend trading (in conjunction with a self-developed 90-degree Apex Triangle Theory) for some time now, after having tried many, many, many, many different trading techniques having gone to full time future trading over a year ago. In the box I've drawn what I would consider a healthy trend development. A healthy trend tends to last for 40-50 bars once it "launches", whichever timeline it was on. What I consider a "healthy trend", develops when I see the trend change and the price continues PAST that trend change point. I then want to see it return to the trend change price point, and bounce off of it and continue past the last high it just made.
This current trend we were on, developed on June 22, 2022 when the 1-Hour bar closed at about 3750. It lasted for 42 bars. You can find these healthy trends developing on ANY timeframe, just realizing that they only last so long (about 40-50 ticks) and tend to have 3-4 'higher, highs'. If it last for longer, the next sequence of trend trading is to discover what timeframe trend it may be on, because there is likely a longer timeframe trend that has developed and you've missed it.
When this trend develops, you're know you are coming to a likely end because you hit a new trend that doesn't continue, and you'll typically see the last 1-2 highs, that either beat or match the last high and does NOT have a higher RSI/MFI value. I'd suggest analyzing to see if a longer timeframe trend has developed and you've missed it, or take profit and exit and wait for the next trend to develop.
The key benefit to trend trading, is you are not predicting the market, you are reacting to the market. In the year I've been trading futures full time, I learned that the market can be very unpredictable, especially doing a period like now where it tends to be headline trading more than logically trading.
As always, a disclaimer that this is not official financial advice, and that any risk you take in trading is yours, and yours alone. That being said, as I always end with this note, remember that your RISK MANAGEMENT plan is the most important aspect of any trading plan.
As of 22:30 EST, there are two healthy, yet competing, trends developing. They are the 2-Hour Downtrend, and the 4-Hour Uptrend.
As of writing this, there is some concern on the 4-Hour Uptrend formation as it closed below it's trendline of 3829, and when it got back above it didn't continue any momentum. The 4-Hour Uptrend is however supported at this time of a 3-Hour Downtrend Reversal.
The 2-Hour Downtrend formation looks healthier, as it has not closed above it's downtrend mark of 3832.
I'd expect to see a battle between this 3832 and 3824 zone, and would expect things to rally again if it crosses above 3840ish or to continue this decline if it drops below 3815ish. When these battles occur, I look to the lower timeframes for trade trend reversals, as I've explained previously.
That being said, with the Consumer Confidence coming in lower than expected today, I'm expecting a lower than expected GDP, and that will cause this dip to continue back into the 3600s, or further down, where it will remain until the next CPI data comes out.
----------------------------------------------
If you'd like to learn more about trend trading, continue reading on. I suggest any new trader learns to trend trade, as it tends to be significantly more profitable and reliable, in my opinion, than some of the more 'advanced' trade strategies that can be more complex.
I've been trend trading (in conjunction with a self-developed 90-degree Apex Triangle Theory) for some time now, after having tried many, many, many, many different trading techniques having gone to full time future trading over a year ago. In the box I've drawn what I would consider a healthy trend development. A healthy trend tends to last for 40-50 bars once it "launches", whichever timeline it was on. What I consider a "healthy trend", develops when I see the trend change and the price continues PAST that trend change point. I then want to see it return to the trend change price point, and bounce off of it and continue past the last high it just made.
This current trend we were on, developed on June 22, 2022 when the 1-Hour bar closed at about 3750. It lasted for 42 bars. You can find these healthy trends developing on ANY timeframe, just realizing that they only last so long (about 40-50 ticks) and tend to have 3-4 'higher, highs'. If it last for longer, the next sequence of trend trading is to discover what timeframe trend it may be on, because there is likely a longer timeframe trend that has developed and you've missed it.
When this trend develops, you're know you are coming to a likely end because you hit a new trend that doesn't continue, and you'll typically see the last 1-2 highs, that either beat or match the last high and does NOT have a higher RSI/MFI value. I'd suggest analyzing to see if a longer timeframe trend has developed and you've missed it, or take profit and exit and wait for the next trend to develop.
The key benefit to trend trading, is you are not predicting the market, you are reacting to the market. In the year I've been trading futures full time, I learned that the market can be very unpredictable, especially doing a period like now where it tends to be headline trading more than logically trading.
As always, a disclaimer that this is not official financial advice, and that any risk you take in trading is yours, and yours alone. That being said, as I always end with this note, remember that your RISK MANAGEMENT plan is the most important aspect of any trading plan.
Comment:
Please note - That should say a 3-Hour DOWNTREND signal, not uptrend signal. I dragged the last Uptrend bar over to use the same color scheme for 3-Hour, and forgot to correct the text.
Comment:
It is appearing that the 2-Hour downtrend is winning out. I'll be going in short today. That being said, if the price DOES go up still, then look for those 1-Hour and 30 Minute downtrend areas as sustaining their trends and sending the price downward.
If price continues down from here, and we are on the 2-Hour trend, expect downward movement for about 4 days.
If the price moves up and bounces off 3860, expect price dropping for about the next 2 days.
If the price moves up and bounces off the 3875 and comes down, expect it to mostly just be a downward movement today and just into tomorrow before another flattening consolidation.
If it goes up past 3875 and makes it past the 30-Minute Resistance downtrend, then the 4-Hour trend is actually working out and so then expect about a week and a half up upward movement.
If price continues down from here, and we are on the 2-Hour trend, expect downward movement for about 4 days.
If the price moves up and bounces off 3860, expect price dropping for about the next 2 days.
If the price moves up and bounces off the 3875 and comes down, expect it to mostly just be a downward movement today and just into tomorrow before another flattening consolidation.
If it goes up past 3875 and makes it past the 30-Minute Resistance downtrend, then the 4-Hour trend is actually working out and so then expect about a week and a half up upward movement.
Comment:
So... that 4-Hour Uptrend... if this 4 Hour bar closes below 3815, is going to be the beginning of a 4-Hour DOWNTREND movement now. If this uptrend fails, then there is NO Uptrend formation at this point, as price has fallen well below the 6-Hour Uptrend of 3890 and clearly the 12-Hour Uptrend signal was just a price reversal point.
If the 4-Hour dissolves, then the only potential turn around points will be 6-Hour downtrend signal and the 12-hour downtrend signal turning into reversals instead of continuation movements. That would confirm the healthy downtrend at this point is the 2-Hour trend, and again, that means we are looking for about 4 days of downward movement.
If the 4-Hour dissolves, then the only potential turn around points will be 6-Hour downtrend signal and the 12-hour downtrend signal turning into reversals instead of continuation movements. That would confirm the healthy downtrend at this point is the 2-Hour trend, and again, that means we are looking for about 4 days of downward movement.
Comment:
I was stopped out of my short at 3825 for a very small profit. Still looking at things going down, but I'm curious on this recent upward momentum. Could be a stop hunt.
This puts the 3m and 5m on an uptrend, and the 15m showing an uptrend signal but is still forming in this current bar. I'll probably re-enter a short position if things fall below 3832. Or I may just sit out at this point until the GDP data is released.
This puts the 3m and 5m on an uptrend, and the 15m showing an uptrend signal but is still forming in this current bar. I'll probably re-enter a short position if things fall below 3832. Or I may just sit out at this point until the GDP data is released.
Trade active:
I've gone short again at 3838. I'm going to take this as a better entry point than 3832 where I had previously entered. I'll just add the small profit I made from that trade towards my risk management and have a stop set at around 3857.
Comment:
GDP data in, slightly worse than predicted. GDP at -1.6%, forecasted at -1.5%, however, the data that might make that worse is that price GDP is higher than predicted, and sales data is lower.
Overall, economically, that would mean our economy is more expensive, but making less money and less people are buying. None of the numbers were staggeringly outside of predictions though, but I certainly see that information dissolve any potential rally. Guess we shall see at 9:30 EST when US markets open.
Overall, economically, that would mean our economy is more expensive, but making less money and less people are buying. None of the numbers were staggeringly outside of predictions though, but I certainly see that information dissolve any potential rally. Guess we shall see at 9:30 EST when US markets open.
Comment:
The next big thing today is the panel, recently called the "Transitory Trio Panel", where Chairman Powell will speak at an ECB panel along with Andrew Bailey (England), Agustin Carstens (International Banks), and Christine Lagarde (EU). Link above.
I can't post links, but Google "ECB Forum on Central Banking" and you should be able to find it to watch.
I can't post links, but Google "ECB Forum on Central Banking" and you should be able to find it to watch.
Comment:
Zero guidance on which trend between the 2 Hour Downtrend and 4 Hour Uptrend is winning going into the open. If this up and down continues, I'd recommend to simply exit the day, as that is not a wide enough birth to bounce trade and wait for tomorrow.
Trade closed manually:
I have closed my short trade at 3818 and taken profit. Not a major profit today (about 25 points) but honestly, this back-and-forth battle of these two trends isn't worth staying in when I can say I've made my daily profit goal x2, add to a great week I've had already, and evaluate further. I'll be checking in as the day goes to see if I see something showing better direction.
Safe trading for those still in the market today!
Safe trading for those still in the market today!
Comment:
Which way do we go, which way do we go.... lol
I still have a bearish sentiment on any movement, but I'm pretty glad I called it a day and am no longer dealing with this. Pretty decent volume over this 1 1/2 hours the markets been open also.
There is an uptrend line that that dip at 9:45 hit that was around 3800. The psychological effect also of 3800 coupled with that trendline luckily brought some optimistic long trades into the market. I think that will fizzle out and as it begins to move down they will jump out for small profit or have stop losses hit and we finally head down further.
In regards to the ECB forum, mostly hawkish talk by Powell and his commitment to focusing on bringing inflation down, knowing it will bring pain to the markets and could cause unemployment.
I still have a bearish sentiment on any movement, but I'm pretty glad I called it a day and am no longer dealing with this. Pretty decent volume over this 1 1/2 hours the markets been open also.
There is an uptrend line that that dip at 9:45 hit that was around 3800. The psychological effect also of 3800 coupled with that trendline luckily brought some optimistic long trades into the market. I think that will fizzle out and as it begins to move down they will jump out for small profit or have stop losses hit and we finally head down further.
In regards to the ECB forum, mostly hawkish talk by Powell and his commitment to focusing on bringing inflation down, knowing it will bring pain to the markets and could cause unemployment.
Trade active:
I went in for one last trade today, short at 3825. There is a triangle that developed between 3840 and 3800 on the 3m timeframe. It broke and stayed out for 3 bars. I've a stop set for a small profit take if it fizzles out again, and won't be rejoining if it does.
If the triangle break holds, that the distance of the wide part of the triangle should be the movement of the break from the triangle, so 40 points below 3825... target would be 3785 for the day.
If the triangle break holds, that the distance of the wide part of the triangle should be the movement of the break from the triangle, so 40 points below 3825... target would be 3785 for the day.
Comment:
I'm still holding for short. I got stopped out, but just ended up going back in at 3825. Not sure we are going to move down today after all, but I've been able to just sit in and wait for some time now with at least a +2 point stop loss.
However, wanted to update anyone if they are still looking at this, the 4-Hour timeframe is now in a downtrend, with the level at 3813. That means there are NO uptrends 4 hours and below, and the 6 hour uptrend signal was way back up at 3890. So if the trend continues to hold, that will be the next one to flip over to a downtrend. If that occurs, I'd take only short positions, as the only uptrend left is the 12-Hour Uptrend signal at 3926, which we already recognized was actually a reversal signal, and not an actual uptrend.
However, wanted to update anyone if they are still looking at this, the 4-Hour timeframe is now in a downtrend, with the level at 3813. That means there are NO uptrends 4 hours and below, and the 6 hour uptrend signal was way back up at 3890. So if the trend continues to hold, that will be the next one to flip over to a downtrend. If that occurs, I'd take only short positions, as the only uptrend left is the 12-Hour Uptrend signal at 3926, which we already recognized was actually a reversal signal, and not an actual uptrend.
Comment:
Much like we dealt with in the 12-Hour uptrend signal a few days ago, the 4-Hour downtrend signal has yet to hold. Still has two hours to go, but thus far 4-Hour Downtrend has only shown as a reversal. I've officially exited all positions after catching tiny profitable downtrades, all of which stopped me out for little 2 or 3 point gains when I sold out.
Look for moves below 3813 before accepting a bearish move downward and anything above 3832 as potential bullish momentum. Although honestly unless something really begins to happen here, I'd stay out for the rest of the day. A small 19 point gap isn't a great going to turn a lot of profit trying to bound trade back and forth, and with all the pressure cooking up inside this day, if something gives, it will likely give quick and throw a negative trade if you're on the wrong side of the momentum.
Look for moves below 3813 before accepting a bearish move downward and anything above 3832 as potential bullish momentum. Although honestly unless something really begins to happen here, I'd stay out for the rest of the day. A small 19 point gap isn't a great going to turn a lot of profit trying to bound trade back and forth, and with all the pressure cooking up inside this day, if something gives, it will likely give quick and throw a negative trade if you're on the wrong side of the momentum.