The Bear Crown/Head and Shoulders pattern is very common across the Forex and is one of those that leads to strong reversals.
Based on what is taking place on the EURO AUD, we may already have the Left Tip and Centre Tip already formed. If we see a Right Tip, it would represent the start of reversal. This would lead to a Downtrend that is needed to complete the Range Setup taking shape on the Daily Chart.
If we get a strong breakout below the Uptrend Lines, Setups and Signals that provide 200 Pips within this expected 1000 Pip drop, are likely to be there for the taking.
This has been the most helpful forum post considering it is in alignment to my trading method (swing trading). I'm still a newbie trading on demo though. Yet to iron out some things like trading breakout, and figuring entry signals. Thanks a lot Duane, keep posting, you have no idea how many are learning from you. :-)😎
......Yet another example of how Consolidation Breakouts with Large Candles lead to False Breakouts....another trap of the market..
EURO USD looked set to break higher with this Large Candle...
...but I expected it to at least pause before either moving sideways or reversing sharply....
This is because these Large Candles, as attractive as they are, hardly lead to successful breakouts.
Figuring this out and identifying the types of Candles that actually lead to profitable breaks was what I had to do...
I cant tell how much money was lost and time spent in spotting the right signals to trade- made a big difference in results.
Although this has taken place on the Daily Chart, these Large Candles are seen across all time frames as well. Its not so much the size in terms of Pips but relative to the other Candles on the time frame being traded. So whether you are a Day or Swing Trader, they will appear from time to time.
Once you can make this distinction, it becomes much easier to avoid these traps.
These Videos will now show you examples of a more aggressive Swing Trading approach based on my current Methodology. They will show how you can take advantage of profitable movements in the market each week that can provide an average of 150 Pips per trade. As long as you know which trading rule to apply to the trading opportunity presented, you will be able to profit from these trades on a consistent basis every month.
There are now 5 Swing Trading Strategies that I use which will be showcased here which you can easily apply to your trading.
1. Trading Within Consolidation using Support and Resistance
2. Trading Within Consolidation using Daily Chart Signals
3. Trading Within Consolidation using 4 Hour Chart Signals
4. Trading Strong Trends/Consolidation Breakouts
5. Trading Slow Trends/Consolidation Breakouts
As Swing Traders using Price Action/Candlestick Signals, a big challenge when Trading within Consolidations is figuring out which time frame to use for entry or if we should simply enter at the S/R areas. There are several Technical Factors that determine which strategy to use but one of them has to do with the size of the Consolidation. For small ones such as in the Video below, volatility at the S&R areas is minimal, making it easier for us to enter there without waiting on the Candlestick Signals. For larger Consolidations, however, Daily and 4 Hour Chart Signals have to be used given the increased volatility/spikes at these areas.
There are some Trends and Consolidation Breakouts that are very fast and are characterized by Strong, Large Candles while others have Small, Slow Candles. These require 2 Types of Trading Strategies to ensure we aren't affected by unexpected pullbacks that lead to losses.
These Trades will also be shown in the Dukascopy Trader Contest to show how they perform under a competitive environment. By targeting an average of 150 Pips per trade twice a week, it is possible to generate 1200 Pips each month - very large turnover that can provide strong Short Term and Long-Term Gains.
Any questions and comments, fire away.
102 PIPS GBP CAD - TRADING WITHIN CONSOLIDATION USING SUPPORT AND RESISTANCE
There is nothing more frustrating than seeing a strong floating profit turn into a loss in a matter of minutes. This can be avoided by establishing and obeying a rule for how long you hold your trades before deciding to close them. Sticking to this rule will help to minimize the losses due to holding out for more Pips than the market is going to give us.
This recent trade on the GBP CAD which had to be closed at the end of my Holding Period for this type of trade shows how crucial this rule is to trading success, given the sharp reversal that took place right after exiting the trade.
Once you obey this rule, consistent gains will be a regular part of your trading.
GBP USD - BEARISH BREAKOUT FROM PENNANT OR BULLISH REVERSAL?
We have a scenario now on the GBP USD where the Support of its Pennant on the Daily Chart is now taking place. Based on the theory of Consolidations, it could either continue Bearish or reverse to take us back inside of the Pennant.
There are certain technical factors and signals that tell us which of these 2 scenarios will take place and once you know what these are, you`ll be able to trade them profitably every time. This helps to avoids situations such as:
1- Jumping into the market at the first sign of a break of the Pennant only to see the market reverse sharply back inside.
2 - Start trading when we see the market showing signs of heading back inside of the Pennant only to see it U-Turn sharply to continue the breakout.
Both cause losses on a regular basis for traders, but they can be minimized once we know what those factors are that predict which situation will be the correct one.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.