This is a simple project that is looking for two possible scenarios in the unfolding of events. The most important phenomenon that will be relevant in analyzing and possibly trading this instrument using the elements in the snapshot, is the price action at the shapes. If coincidences of price action near the shapes or icons occur, we can treat them as potential pivot points, reversal signals.
This is very straight forward and easy to trade when a potential Japanese Candlestick reversal pattern forms. You trade in the direction of the signal candlestick, using stop loss below its low, or above its high, and my personal preferred method of trailing stop loss, is to use the highs and lows of newer longer candlesticks in the wave that we are riding, that provide new lower lows or higher highs. /This method is highlighted with purple in the past price action as an example, but other methods can be used, as this is likely to get us out of the position, earlier than the actual end of the wave we are riding. This is a discretionary approach and anyone should use their own knowledge and wisdom of the markets to trade accordingly with their preferred and suitable strategy for their trading account.
One other option would be to stay in the position until a tradable reversal signal occurs, reversing the position, but this could encounter duds, where signals are not successful, a case in which you are left out of the market, leaving money on the table.
Leaving the position managing aspect aside (which could actually be more relevant than entry points), this project is considering two main scenarios: a short at the green rectangle with relevant price action that might signal a reversal, or a long position taken somewhere at the red rectangle after a bullish engulfing or other candlestick pattern. The rectangles are potential support and resistance zones. The target above 96 might be too bold, but it is important to acknowledge that price action, many times, is much more important than our perception of what should or could happen. What is happening, is much more important than our imagination. /That is why I prefer the Japanese Candlesticks type of analysis, because they tell their own story of reality: highs, lows, momentum, sentiment, etc.
This is very straight forward and easy to trade when a potential Japanese Candlestick reversal pattern forms. You trade in the direction of the signal candlestick, using stop loss below its low, or above its high, and my personal preferred method of trailing stop loss, is to use the highs and lows of newer longer candlesticks in the wave that we are riding, that provide new lower lows or higher highs. /This method is highlighted with purple in the past price action as an example, but other methods can be used, as this is likely to get us out of the position, earlier than the actual end of the wave we are riding. This is a discretionary approach and anyone should use their own knowledge and wisdom of the markets to trade accordingly with their preferred and suitable strategy for their trading account.
One other option would be to stay in the position until a tradable reversal signal occurs, reversing the position, but this could encounter duds, where signals are not successful, a case in which you are left out of the market, leaving money on the table.
Leaving the position managing aspect aside (which could actually be more relevant than entry points), this project is considering two main scenarios: a short at the green rectangle with relevant price action that might signal a reversal, or a long position taken somewhere at the red rectangle after a bullish engulfing or other candlestick pattern. The rectangles are potential support and resistance zones. The target above 96 might be too bold, but it is important to acknowledge that price action, many times, is much more important than our perception of what should or could happen. What is happening, is much more important than our imagination. /That is why I prefer the Japanese Candlesticks type of analysis, because they tell their own story of reality: highs, lows, momentum, sentiment, etc.
Comment:
This candle right here in this position is indeed interesting, but will probably not pass the test of selection for a potential reversal signal. The main scenario envisioned a climb above the red rectangle somewhere in its time frame. Not sure if this scenario will still stand as we approach its beginning. Also, the end of the blue rectangle is also relevant, as it signals a potential weakness in its support level.
Comment:
A decent rebound at the top edge of the red rectangle. Any long biased trader will hope for a decent correction towards the "i" icon for a potential long entry in the very Long Bull Run Scenario on the up longer term.
Comment:
Second encounter with the red rectangle confirming its power influence in this case being resistance. It is an intriguing bearish candle and setup to consider from the perspective of Japanese Candlestick analysis as a potential reversal signal, but I do not like the position relative to the construction of the wave. Also, I am still bullish biased and just waiting/hunting for more appealing opportunities...
Comment:
4 candlestick shadows above 78 and an inflection point at the marked time stamp. I am still bullish biased on this one and did not take action on the bearish engulfing, as I can rather see it push even higher eventually towards 80 instead of revisiting 73...
Comment:
The red rectangle has proven to be a solid resistance & consolidation zone but it is almost over. I am still waiting to see the ~82 level being hit. Let's see if it picks up some steam after escaping from the rectangle zone.
Comment:
82 reached, next target 86. looking forward to see if there will be any correction that provides another entry in this potential bull run.
Comment:
Quick update: Interesting situation on crude which could lead to a correction and retest of 79.
Comment:
A drop and a stop. Bulls might try to get back in this next week with a push attempt for 84.
Comment:
Past 84 and looking to go for 86. Don't know what could be next to be honest. Maybe next week it will become clearer if it is ready for a break or a correction.
Comment:
86 reached.
There is the potential for a broader pullback in oil in the next trading weeks.
There is the potential for a broader pullback in oil in the next trading weeks.
Comment:
Both 2 added icons were hit. With the current situation in the Middle East I don't know if the lower rectangles will be hit. It all depends on how things unfold. The Target Icon Price Level above might take a while to be reached, the case for it not to be hit this year has a lower probability imho. At the same time one extreme scenario should be highlighted because of the potential of escalation and chaos: Oil at 300$.
Comment:
A stop at the blue and a little bit of indecision in the oil market right now. Don't know when the market might start trending again or in which direction, but I added the red zone towards which my bias is leaning, but with potential bearish pressure pushing from above.