Eurusd-3
Education Post - Most Common Classical Revesal PatternsHello everyone these are some of the most commonly found classical reversal patterns that you would come across on a daily basis. You can read more about them from the Encyclopedia of Classical Chart Patterns By Thomas N. Bulkowski which is a must read.
Cheers
AHEAD OF FOMC TRADE + CURRENCY CORRELATION EXPLANATIONHi traders,
I recently checked my long trade at EUR/GBP and got an interesting idea. I wanted to share with you not only about the mechanics & reason behind my trade but also about the currency correlation between USD, EUR & GBP that can some-how works in my favor. (Assuming we see some "Weakness" in USD when Market reacted to the Fed statements).
The Trade : In this particular trade I'm using a very simple strategy that I developed called S M Fibs, which basically a strategy that is using Structure, MA, and Fibonacci as its combination of rules. I also required a supportive higher time-frame bias (uptrend on daily chart) in order to take this trade. Entry, SL and TP are as seen on the chart.
The Currency Correlation : We know guys that USD and EUR overall correlated negatively (similar with the USD and GBP) that means we can expect the price of EUR and GBP to rise if the price of USD is going lower. Now, keep in mind that the level of negative correlation between EUR and USD is higher than the one on GBP and USD, because of that statistically speaking we can expect the EUR to move higher than the GBP when USD move lower. That would be translated into EUR/GBP going up which means helping me to reach my target.
So, that's it for today guys. Hope this one's helpful as well as educational.
Regards
Fedro Christian
Don't Be the Kid at Candy Shop [Educational Post]Hi Friends,
I have left the above Nifty chart without proper description on purpose. Just take a look at the chart, if you can understand why those lines are drawn, its fine. If you don't then also its perfectly fine. But whats not fine was,taking trade decisions without knowing what those lines where.Do you think complex systems are better than simple trading systems ? That is a myth that only complex trading systems make Money, No Not at all. Simpler the system, the easier it becomes to follow the plan with discipline.
Regarding above chart its just couple of Bull's (B) & Bears (B) Elliot Waves combined with Trendlines, there is nothing much and we use it for taking a trade decision, the area within curve mentions the Island reversal pattern. So its totally upto us to decide which B will win and determines the direction of Nifty. But I believe, both B will be taking rest till the Fed meet gets over (Sep 20&21), for us it will be by Thursday (Sep22), till then Nifty may range within support / resistance without proper direction and having some wild swings signalling false breakouts. Enough of explaining the above scenario I believe, bcos I planned this post to be more than normal analysis...
There are many authors in tradingview, using many strategies, so if you get confused or don't get the reason why the trade was taken in particular direction feel free to ask the authors of the post, Why & How ? Unless, you ask questions n learn, you can't learn completely, thats why comment sections are for, to discuss your views/opinions even if you are completely newbie trader. No one will make fun of you, if you feel that your question is simple or silly, Never mind just ask Me, I will clarify your doubts, I assure. See, I don't gain anything from this, its all for your benefit n to protect your hard earned Money.
Kid at the Candy Shop & Trader without Plan :
Consider, you are telling a kid that you will buy whatever candy he/she wants , they may tell some candy name. Now, take the same kid to biggest candy shop which is filled with tempting and mouth watering cakes, candies and ice-creams and ask what the kid wants ? We assured we will buy whatever the kid wants, Now the Kid will get confused and will be spoilt for choice about what to choose and ends up buying most of the candies, cakes n icecream's which affects the kid's health directly {cold or fever}.
In the same way, when we begin to trade, we either have one aim I need to live little better or make some small amount of Money. But after entering the market we will be spoilt for choices available at our discretion to trade from Stocks, Futures, Options,commodity,currency, Intra, Scalp,Positional and like the kid mentioned above, we trade everything comes our way from pennystocks to Forex, Suzlon to LT, SBI to Banknifty,without any second thoughts imagining that you can make money, but end up losing your capital. If you do like that Kid @ candy shop, You will go Broke. That kid spoiled his health and you will spoil your Wealth. Yes, its harsh, but truth to be told friend, Never Be that Kid at Candy Shop !
AB=CD & Gartley Patterns // Educational ®Hi Traders,
The idea is to share a tiny portion of the study of Larry Pesavento and Leslie Jouflas about the AB=CD and the Gartley Patterns, with those who are introducing the advanced patterns in your trading method;
You will have a lot of information about those guys on the web.
Special Thanks to Alexander_Nikitin (www.tradingview.com)
Please enjoy ;)
Safe Trades;
LEARN TO TRADE THE GARTLEY PATTERN IN 5 EASY STEPSSTAGE 1:
THE BULLISH IMPULSE LEG
A bullish impulse leg is a strong move in price action to the upside.
The impulse leg can be a mixture of bullish and bearish candles, but must have a bullish overall direction.
The start of the impulse leg should be marked as X and the top of the impulse leg should be marked as A.
STAGE 2:
B LEG RETRACEMENT
Now that you have identified your X to A impulse leg you are now looking for the B leg, which is a retracement of the X to A impulse leg.
Take your Fibonacci retracement tool and draw from your X leg to your A leg.
The crucial Fibonacci levels you are looking for are the 61.80% and 78.60%
Price action must at least touch the 61.80% retracement but cannot touch the 78.60% retracement.
As you can see by the illustration, the candle does not need to close below the 61.80% retracement but must at least spike through.
The bullish Gartley pattern will be invalid if price action touches the 78.60% retracement of the X to A move.
STAGE 3:
C LEG RETRACEMENT
Once you have identified a valid X to A impulse leg and a B leg retracement, you are now looking for a valid C leg retracement.
Take your Fibonacci retracement tool and draw from your A leg to your B leg.
The crucial Fibonacci retracement level you are looking for is the 61.80%
Price action must at least touch the 61.80% but cannot spike above the A leg resistance.
The candle does not need to close above the 61.80% but must at least spike through.
The bullish Gartley pattern will be invalid if price action spiked above the A leg resistance.
STAGE 4:
D LEG COMPLETION
Now that you have a valid X, A, B and C move you are looking for the final leg in price action at which point you will buy the chosen currency pair.
Take your Fibonacci retracement tool and draw from your B leg to your A leg.
You are looking for a 1.272% which will now give you a valid D leg completion of the bullish Gartley pattern .
STAGE 5:
PLACING YOUR TARGETS
When looking to take targets on the bullish Gartley Pattern the first step is to use your Fibonacci retracement tool.
With your Fibonacci retracement tool draw from the A to D leg, you are looking for target 1 at the 38.20% and target 2 at the 61.80%.
To protect the profits you have accumulated at target 1 it is advised you move your stop loss to breakeven once the 38.20% target 1 has been attained, thus giving you a risk free trade to target 2.
KEY NOTES & RULES:
When trading the bullish Gartley pattern, the pattern is meant to be traded at 1.272% D leg completion only. If you believe the pattern is unfolding but price is only at point B, be patient and wait until price reaches the D leg completion.
The power of the pattern comes from converging Fibonacci levels of all points from X to D.
Point B must at least touch the 61.80% retracement but cannot touch the 78.60% from the X to A move.
Point C must touch the 61.80% but cannot spike above the A leg resistance.
Point D is complete when price action touches the 1.272% retracement of the B to A move.
Stop loss must be placed below the X leg structure support.
Stop loss must also be a minimum of a 1:1 risk reward to the 38.20% target 1.
Target 1 at the 38.20% retracement of the A to D move.
Target 2 at the 61.80% retracement of the A to D move.
CURRENCY PAIR:
This pattern like any other is more profitable with certain currency pairs, you should do your own back testing on this before trading the pattern.
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DISCLAIMER:
Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.
Head & Shoulders // Educational ®"Since the beginnings of technical analysis, classical technical patterns have been repeating over and over in all time frames and in all markets.
It’s interesting that these patterns have not changed in centuries. They are truly a reflection of crowd psychology.
Many times you will see the structures of the patterns form with exact Fibonacci ratios. Adding the Fibonacci ratios to these patterns will give the trader an additional tool for timing entries and controlling risk."
LARRY PESAVENTO & LESLIE JOUFLAS
Safe Trades;
Fibonacci Retracement Patterns // Educational ®This is a continuation of my previous published Charts - Check links below...
A portion of Larry Pesavento & Leslie Jouflas work.
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Covering Fibonacci Retracements Entry Patterns;
Fibonacci Retracement Entries;
Fibonacci Retracement Pattern Structure;
Trading The Fibonacci Retracement Pattern;
Risk-Free Trade;
Safe Trades;
The Three Drives Pattern // Educational ®The Three Drives Pattern by Larry Pesavento and Leslie Joufla.
Check other published charts...
Safe Trades;
open.spotify.com
The Butterfly Pattern // Educational ®By LARRY PESAVENTO & LESLIE JOUFLAS
HISTORY OF THE BUTTERFLY PATTERN:
Bryce Gilmore
Bryce has spent a lifetime studying the works of the great masters—R.N. Elliott , W.D. Gann, and many others.
He developed the Wave Trader Program in 1988; it was the first computer program to use all the numbers of sacred geometry, including the Fibonacci summation series. This pioneering led to the discovery of the Butterfly pattern .
Almost two decades and thousands of Butterfly patterns later, it can be said that it is one of the most profitable trading patterns with the proper use of stop-loss orders.
Safe Trades;
EURUSD: SImple Lesson On Price Action AnalysisAfter the recent disappointing loss on a highly anticipated short trade on this pair, I am now re-analyzing this pair from scratch to see what I missed and to see what could happen now.
But while I am doing that, I just want to throw this out there for those that are mystified as what to do next on this pair. There's really no mystery....WAIT! You need to see more price action before you can tell with more confidence what to do. Don't feel like you NEED to be in a trade or you'll miss something! This is a very amateurish mistake.
Anyway, here's what I need to see before I do anything LONG OR SHORT. This is examples of the kind of price action I want to see. If LONG, then I need to see a much clearer move up and away from the freshly broken structure and then a move back down to retest it and if the structure holds, then I would look for a BUY.
IF for a SHORT, then I would need to see prices break below the structure AND break the lower TL of the trading channel it is in and THEN see it retest the structure from the bottom and if that structure holds, then I would look for a sell.
This is pure PA in action. It is the most reliable indicator BUT it takes a lot of patience to execute. And yes, it might not happen this way and yes, you could miss trades waiting on it, But having PA on your side is WAY better than not having it on your side!
Good luck!
How To Read Market Structures, Trends and Their ReversalsHow To Read Market Structures, Trends and Their Reversals – Example EURUSD
It is astonishing fact that most of us still get confused when it comes to reading a market. This is the biggest killer in Technical Analysis and differentiating factor between Wining and Losing trades. No matter what trading strategy traders use, they must always be able to read the chart with naked eyes without any indicators. Below is an example where I have tried to explain it a bit in steps. Lets walk this through together.
Reading A Market Trend:
1. On a chart we always start with a Swing High or Swing Low. In this example we have a Swing High. We call that Initial Structure High (ISH). In case of bull market we will call that as Initial Structure Low. We see that the market has been in heavy bearish action in Step 1. it creates a New Structure Low (NSL) i.e. Swing Low.reading market trend structure reversal
2. Then in in Step 2 it reverses from NSL and tries to retest upwards and gets rejected. However it comes back down to NSL and does not violate it. This is the first major sign of trend reversal as no new Lows are being made. Remember, for a market to stay in bearish trend it has to create new lows.
3. Market then rallies to create a NSH which violates the previous high (Marked In Yellow). This satisfies the second condition for an Up Trend. Remember for an Up Trend we need two conditions i.e. Higher Lows and Higher Highs. This confirms that market trend has shifted.
4. In 4th step we enter a consolidation phase where price moves in a range. In consolidation phase the price does not violate Highs and Lows. It stays in a range.
5.In 5th step, we see that market breaks out of the range upwards creating further new highs. Now for it to stay in up trend it must respect previous low. It is common for the price to come back to retest those lows but it must not violate previous lows.
How To Take Trading Opportunity (S.E.T.):
1. Stop Placement: If we were to take a trade at the market we must have our stops below previous major lows.
2. Entry and Targets: For targets always look at the previous highs. The new previous high from here is the Initial Structure High. So a retest of that High will be our target. But if we are conservative in trading your first target must always be 127.2 Fibonacci Extension of last high. However, this in this chart gives a little less than 1:1 Risk/Reward ratio. If that does not work for us we can either wait for the market to go down a bit and take the entry at market to give us better R/R ratio.
Good Trading
@TradeYodha
