Trends are THE MOST IMPORTANT tool in the toolbox.
Updated
Hello Traders. Hope everyone is staying warm. Snow and zero degree temperatures expected in Virginia.
Many traders use many different indicators. There are so many its impossible to tell which ones are useful. Simplicity is key.
The most important tool in a traders toolbox is the ability to deceiver the prevailing trend. Using higher high/ lower low analysis we can identify the difference between strong market moves and weaker ones.
This stems from the well known philosophy that in order for markets to continue moving in the correct direction they need to confirm momentum shift before making large moves.
-Resistance is considered overhead levels that price struggles to break AND CLOSE above.
-Support is considered under price levels that price struggles to break AND CLOSE below.
Notice how I mention, AND CLOSE. It is 100% required that price CLOSES above the support or resistance level to declare it broken on whatever time frame chart being traded.
After the perfect head and shoulders pattern unfolded many traders continued to short EURUSD without much success (Took a stop loss myself)
One must recognize the downward momentum was triggered by the bearish head and shoulders pattern (see attached post, traded perfectly.) In actuality the trend is still bullish. At the end of the head and shoulders move, trend reversed only briefly. Price was unable to break the low before moving higher.
At (1) the first top was made. After making new highs, we always expect a retest of old resistance confirming support. (2) Price came back and tested old resistance, confirming support in a reckless fashion. This wiped all long traders out and assured direction for short traders who were burned before. Once everyone was mixed up, the trend prevailed to the upside.
Now we find ourselves at (3). New highs have been confirmed so price is expected to retest old resistance to confirm as support around the 1.19500ish level. At this level I will be watching diligently for signs of rejection and ready to take entry on a single close of any rejection formations.
If we confirm price action, targets are estimated around 1.2300.
IF you found this useful or thoughtful Likes/Comments/Follows are much appreciated!
TElphee – Self-made Technical Analyst. 5-year market enthusiast with experience in Forex, Futures and Cryptocurrencies.
Disclaimer: Oanda data shown. This is NOT investment advice.
Many traders use many different indicators. There are so many its impossible to tell which ones are useful. Simplicity is key.
The most important tool in a traders toolbox is the ability to deceiver the prevailing trend. Using higher high/ lower low analysis we can identify the difference between strong market moves and weaker ones.
This stems from the well known philosophy that in order for markets to continue moving in the correct direction they need to confirm momentum shift before making large moves.
-Resistance is considered overhead levels that price struggles to break AND CLOSE above.
-Support is considered under price levels that price struggles to break AND CLOSE below.
Notice how I mention, AND CLOSE. It is 100% required that price CLOSES above the support or resistance level to declare it broken on whatever time frame chart being traded.
After the perfect head and shoulders pattern unfolded many traders continued to short EURUSD without much success (Took a stop loss myself)
One must recognize the downward momentum was triggered by the bearish head and shoulders pattern (see attached post, traded perfectly.) In actuality the trend is still bullish. At the end of the head and shoulders move, trend reversed only briefly. Price was unable to break the low before moving higher.
At (1) the first top was made. After making new highs, we always expect a retest of old resistance confirming support. (2) Price came back and tested old resistance, confirming support in a reckless fashion. This wiped all long traders out and assured direction for short traders who were burned before. Once everyone was mixed up, the trend prevailed to the upside.
Now we find ourselves at (3). New highs have been confirmed so price is expected to retest old resistance to confirm as support around the 1.19500ish level. At this level I will be watching diligently for signs of rejection and ready to take entry on a single close of any rejection formations.
If we confirm price action, targets are estimated around 1.2300.
IF you found this useful or thoughtful Likes/Comments/Follows are much appreciated!
TElphee – Self-made Technical Analyst. 5-year market enthusiast with experience in Forex, Futures and Cryptocurrencies.
Disclaimer: Oanda data shown. This is NOT investment advice.
Note
Correction in the last paragragh. Price is expected to rest old support* to confirm resistance*. Hence euro dollar has made new highs and comes back to test old level.Note
Solid signs of rejection of the high on Fridays open. Waiting for a break and retest of 1.2000 to open short term shorts. Note
Price has broken the low to start on wave 3-4. Even testing old support to confirm it is now resistance. Note
The comments above represent price action moving lower on a shortterm perspective as anticipated. Back to the bigger picture, the original chart, price has moved lower to strong support zones. 1.19000 is likely to be tested tomorrow. 4 hour chart will be my guide to short term trend.
Daily chart will need to show reversal signal before I enter. Patience friends. Market is heavy.
Mid term Eurusd -Long
Short term Eurusd -Short
Note
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