Confirming Trends with the Lower Time Frames GBP/USD Example
Hey Guys!
As you guys know, I'm currently waiting for a pullback to the 1.3313 levels for a long entry on the GBP/USD.
In order to know whether or not I will get this pullback, I look to the lower time frames to see how much long strength or short strength there is.
Now in this case, I want price to come down to my entry level, thus am looking for signs of short term short strength on the lower time frames.
As you can see in the chart, during the initial move long, there were constant signs of long strength on the 1h chart with the trendline break out, then
immediate break back into the trendline. ( Immediate break back in means: the break out candle's close and the break back in candle's open is at the same price level)
Almost giving the "sense" of a "fake" break out.
Then at the peak of the long move, another 1h trendline had a break out, however no immediate break back in. Showing waning short term long strength. (A good thing for me!)
Then soon after, a 4h trendline was broken out with no immediate break back in, showing waning long strength on the 4h chart also.
Then to top it off, there was a 15m fake double bottom that formed igniting 15m short strength. ( I cannot go into detail about fake price patterns here. )
In this way, I use lower time frame break outs to confirm strength in either direction which by default, confirms which way price will go on the higher time horizons.
In this case, I used this method to confirm whether or not I will get the pullback to 1.3313 for a long entry however, this method can also be used to confirm trends.
For if a trend analysis says that the trend is long; the lower time frame's price action should move in a "long trend way".
Just a cool trick for you guys!
Have a great day!
Ken
Disclaimer: This is not Personal Financial Advice.
As you guys know, I'm currently waiting for a pullback to the 1.3313 levels for a long entry on the GBP/USD.
In order to know whether or not I will get this pullback, I look to the lower time frames to see how much long strength or short strength there is.
Now in this case, I want price to come down to my entry level, thus am looking for signs of short term short strength on the lower time frames.
As you can see in the chart, during the initial move long, there were constant signs of long strength on the 1h chart with the trendline break out, then
immediate break back into the trendline. ( Immediate break back in means: the break out candle's close and the break back in candle's open is at the same price level)
Almost giving the "sense" of a "fake" break out.
Then at the peak of the long move, another 1h trendline had a break out, however no immediate break back in. Showing waning short term long strength. (A good thing for me!)
Then soon after, a 4h trendline was broken out with no immediate break back in, showing waning long strength on the 4h chart also.
Then to top it off, there was a 15m fake double bottom that formed igniting 15m short strength. ( I cannot go into detail about fake price patterns here. )
In this way, I use lower time frame break outs to confirm strength in either direction which by default, confirms which way price will go on the higher time horizons.
In this case, I used this method to confirm whether or not I will get the pullback to 1.3313 for a long entry however, this method can also be used to confirm trends.
For if a trend analysis says that the trend is long; the lower time frame's price action should move in a "long trend way".
Just a cool trick for you guys!
Have a great day!
Ken
Disclaimer: This is not Personal Financial Advice.
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