Entry
A Strategy for Market Entry and Exit - Part 2Part 1 can be found here:
Key Tenants
DMI is used as a triggering mechanism to establish support->resistance or resistance->support lines
TRIX used to identify targets to exit and re-enter and on-going trend (if the DMI indicates a down trend, the a negative cross of TRIX over HMA would indicate a level to short
Divergence can happen in both DMI and TRIX to indicate a weakening trend. With the TRIX, it can be a negative divergence where price makes new lows but TRIX makes higher lows or positive divergence where price is making a new low but TRIX is making lower lows in a blow-off fashion.
Stoch indicates overbought/sold conditions with potential leading trigger on trade. Can leverage mid-point levels as trade continuation
SUGARUSD:OANDA as an example reference 4hr chart above
A. This is the period where the -DI crossed up over the +DI signaling that the trend was turning down. For Wilder, the low on this day would be the extreme point and you would enter a short position once price moved below it. A stop would be placed at the high of the same day as the cross. I’m looking at this more from the point of using the closing price instead of the high or low. If the next day closed below this price, then I would enter a short position at that close. At this point, you can use whatever trailing stop strategy you currently used to exit should price move contrary to your position
B. This is the day that the +DI crossed up over the -DI signaling a possible buy. However, price did not close above this line before the ADX (green line on the DMI) dropped below both DI’s and eventually 20. Once this happens, a trend following indicator should not be used and signals that happen now I don’t act on. What has been suggested is that during this time, look for patterns in price and watch for price to breakout of this pattern.
C. -DI again crosses up over +DI and with price closing below this line, a signal to enter short again is given
1. This is the first signal after (A) that indicates a correction may be happening. Once the TRIX crosses up over the HMA, that period’s close is used as the line to determine if the trade will be closed. If price closes above this line, then exit the trade. This is the case and the short position would have been exited
2. Because the trend is still down as indicated by the -DI being dominant, when the TRIX crosses down over the HMA, the close for that period is used to enter another short position.
3. Again, a signal is given to cover the short but in this case, price did not close over this close so the trade would not have been exited even though many periods went by
4. This time, the signal was hit to cover the short and again, due to the trend being down (-DI dominant), the signal was again triggered to re-enter a short position
5. Exit signal given and short was covered
6. This time, the sell signal to re-enter was not hit and price eventually entered a period of consolidation signaled by the ADX dropping below both DI’s and 20
7. NOTE: This is a important part of DMI/ADX that I use and will keep you out of a lot of churn in markets: When ADX drops below both DI’s and/or below 20, don’t use a trend following indicator to take trades. An option is to look for a price pattern (a channel, flag, a triangle, maybe a trend line) for price to consolidate into and then break out of. This consolidation should last for at least 5-7 periods or longer. Use the TRIX to potentially give a signal as to the direction of the breakout. In this case, the breakout was to the down side.
Between (B) and (C), you see a pattern that happens in the DMI where there is a pullback. In these cases, one of the DI’s can become dominant for a briefly.
USDJPY Price Is Breaking Out The ChannelAs you can see on USD/JPY we can see the price is breaking the channel and preparing for a breakout, if that doesn't happen then we are preparing to go short from here , i wait for tommorow.(note that we are in seller's territory)
Happy and safe trading (Follow for more)
DailyFx Forecast:
USD Is neutral
JPY Is bearish
Trend Down
Volitility 26%
$DIS Long Opportunity or Short Entry if It CrashesDisney recently announced positive news surrounding it's executives chain and has held a strong uptrend over the course of the last few months. If the stock breaks and closes above $112.86 there's a good opportunity to go long and follow the uptrend. If it breaks downward though, and closes below $111.12, then an opportunity for a credit spread or put position opens for a really short term trade due to the bullish bias.
EURUSD LONGThe market is trending up for the Euro ("fiber") on the 4h, but I also check on higher time frames, which show some confluence in the sentiment. I do think an entry around 1.0812-1.0819 would be advantageous. I didn't put a risk reward graph, so here is an idea for any trader/investor to pick up and run with . Enjoy and we will be back to see it's progress
USDCAD LongPrice broke through 4H descending trendline, came back to retest at the same point of bouncing from ascending daily trend line and 61.8 78.6% Fib. Price is now breaking through orange resistance area, therefore once 2H candle closes above I will be moving my SL to profit. Target 1: 1.3210 (0%) - Target 2: 1.3264 (-27%) to complete ABCD fib pattern.
My trade was placed on Friday 24th (late post). My entry was perfect, very happy with this analysis.
USD/CAD New Entry Opportunity If you take a look at the last USD/CAD opportunity I posted, you will see that price is currently dropping from the resistance level that was identified. I am in this trade from the resistance level I posted, however here is another opportunity for an entry into this trade. Price has a bias to fall to the downside after breaking out of the pendant - this will complete the target that I set on the last USD/CAD post. (View this chart in the 5 min interval for a clearer picture)
GBPUSD Long Stop Entry Order With strong results in the UK and the US the pound has continued to fall against the dollar as people are more concerned over the Brexit rather than Trump, I believe we are coming out of a downward trend and we will see the GBP break resistance and continue up to either the 0.5 fib or 61.8 fib from the trend at the beginning of the month. I believe 1.243 is a good open order and look to take profit at 1.252 TP1 and 1.256 TP2.
EURJPY Potential Shorting OpportunityWith today's announcements from ECB President Draghi bringing in strong EUR sellers we can bet on continued weakness. Today's spike high confirms the 123~ resistance zone and that sellers are now in control. An outside return to previous resistance at 121.88 or support at 122~ will offer a probable shorting opportunity. Downside risk may be supported at 120.88 then 120.16.
GBPUSD Bearish BatHi Trader,
There is a bearish bat pattern setting up on Pound with a D leg completion at 1.26300.
See trade details below. I always know my entry and exit prices BEFORE entering a trade, consistency is king in this business, assuming you have an edge ;)
Trade details:
Entry: 1.26270
Stop: 1.26840
Target 1: 1.25110
Target 2: 1.24330
Have a great week of trading!
Luke
AUDNZD ENTRY 4H - COMBINATION OF TRUNCATED ELLIOTT WAVESLOOKING FOR A BUY SET UP IN AUDNZD. WE HAVE A BLUE AND RED ELLIOTT TRUNCATED WAVES, YOU CAN VERIFY IT BECAUSE OF THE PURPLE STRUCTURE AT THE TRUNCATION ZONES.
THE COMBINATION IS ITSELF A 4H CORRECTIVE STRUCTURE FROM THE FIRST IMPULSE FROM -B- AT THE WEEKLY -ABC- CORRECTION I POSTED BEFORE THIS ANALYSIS.
I AM WAITING FOR THE MARKET TO CONSOLIDATE IN A FLAG AT THE END OF THE 4H CORRECTIVE STRUCTURE SO IT MAKES THE FINAL IMPULSE FOR A BRAKEOUT.
CARLOS
[DXY LONG ENTRY] Entering a 1:1.5 tradeThe price went down as expected in my previous chart () and I'm now LONG entering the market in a 1:1.5 risk trade. My stop loss is setup at the nearest support level.
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"In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten. " - Peter Lynch
At Market Cypher! USDJPY 4HHey traders,
USDJPY 4H has just put in a nice Cypher pattern. I was actually involved in this last night when the 0.786 retracement of X-C was hit, however this morning it has pushed slightly lower and is still valid. As a result, you're getting a better Risk Reward on this pattern.
Will be looking for the usual double target positions and rolling the stops from the first position to break even once target one is hit.
Keep an eye on this one!
Fibsii Team