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GBP/USD: a big bearish move is around the corner?Last week, when the price was sitting around the 1.202 - 1.204 zone, we executed long positions and aimed for the current level of crucial resistance. Now that a decent double top pattern has been formed, we are expecting for a deep bearish leg and liquidity grab before the uptrend may resume. We are aiming towards entering short positions upon further price development and targeting the zone below the freshly formed bottom (as indicated on the graph) as our initial destination. From there, another trade analysis will follow.
Short
by Investroy
10
HOW TO TRADE FIBONACCI RETRACEMENTS: THE SHORT GUIDEHey there, traders. One of the common tools we use for technical analysis are Fib retracements and a lot of you been asking on how to use them properly. Well, today is your lucky day :) Fibonacci Retracement is a technical analysis tool that is widely used by traders to identify potential levels of support and resistance in financial markets, including forex markets. The tool is based on the mathematical sequence known as the Fibonacci sequence, which is a series of numbers in which each number is the sum of the two preceding ones. The Fibonacci Retracement levels of 0.5 and 0.618 are two of the most important levels used in this tool. In this article, we will discuss how to use these levels for trading forex markets. Understanding Fibonacci Retracement Levels Before we dive into the specifics of using the 0.5 and 0.618 levels, let's briefly review the concept of Fibonacci Retracement. The tool is based on the idea that markets tend to retrace a predictable portion of a move, after which they may continue in the same direction or reverse. The retracement levels are calculated using the Fibonacci sequence, and they represent potential levels of support or resistance. The key levels are 0.236, 0.382, 0.5, 0.618, and 0.786. Using 0.5 and 0.618 Levels for Trading Forex Markets The 0.5 and 0.618 levels are particularly important because they are close to the midpoint of a move, and they are based on the golden ratio, which is a key number in mathematics and nature. The 0.5 level represents a 50% retracement of a move, while the 0.618 level represents a 61.8% retracement. To use these levels for trading forex markets, you can follow these steps: Step 1: Identify a Trend The first step is to identify a trend in the market. You can do this by analyzing the price action on a chart and looking for a series of higher highs and higher lows in an uptrend, or lower highs and lower lows in a downtrend. Step 2: Draw Fibonacci Retracement Levels Once you have identified a trend, you can draw the Fibonacci Retracement levels using a tool provided by your trading platform. You will need to identify the high and low points of the trend, and then draw the retracement levels from the high to the low in an uptrend, or from the low to the high in a downtrend. Step 3: Watch for Reversals at 0.5 and 0.618 Levels The 0.5 and 0.618 levels are potential levels of support or resistance, and they can act as turning points in a trend. If the price retraces to one of these levels, you should watch for signs of a reversal, such as a bullish or bearish candlestick pattern, or a divergence in an oscillator indicator or any other personal confirmation for potential entry. Step 4: Confirm with Other Indicators To increase the probability of a successful trade, you should confirm the potential reversal with other technical indicators, such as a moving average, a trendline, or a momentum indicator, check with the fundamentals and most importantly confirm that it aligns with your original bias regarding the pair. This will help you to avoid false signals and improve your trading accuracy. Step 5: Enter the Trade and Set Stop Loss and Take Profit Levels Since the entry was at the "Golden zone", the exit would be around the 0% Fib level. Yes, you just missed half of the trend, but it's a consistent tool that can help you get that edge over the market that you need. We hope you found this useful and please let us know on what you would want us to cover next!
BITSTAMP:BTCUSDEducation
by Investroy
13
GOLD (XAU/USD): a multi-timeframe perspective. Correction time?Firstly, let's take a look at the Weekly timeframe graph as illustrated on the left-hand side of the screen. We may observe that the price has been consecutively printing massive bullish candles after having rejected a crucial level of support (1802 - 1810) highlighted on the graphic. Zooming into the Daily timeframe chart, it can be inferred that the price has been rocketing to the upside, and that it needs for some correctional moves to happen before being able to continue its bullish impulses. Hence, we are anticipating for the price to consolidate around the area circled on the chart before initiating a drop and POTENTIALLY reaching the zone of resistance aligning with the 50% Fibonacci retracement zone.
OANDA:XAUUSDShort
by Investroy
6
USD/CAD: a potential build-up for a 100-pip dropLooking at the 2D timeframe chart of USD/CAD, we may observe that a descending triangle pattern has been formed and that the price has successfully broken the upper boundary (the descending trendline) of it. Using the Fibonacci retracement tool, we might identify that the 38.2% key Fibonacci level nicely lines up with a crucial area of previous resistance that now acts as support that is identified on the graph. We are expecting for the price to continue its short-term bearish movements and reach the price level highlighted on the graphic. From there, due to the fact that our bias remains bullish, we will possibly look into executing long positions and riding the next up-trending wave.
Short
by Investroy
21
Risk-to-Reward > Win RateWe have mentioned it in a list of our previous educational posts and we will state it again: your risk-reward plan is much more important than your win rate. You can have a 90% win rate and still be losing in the long-run. On the contrary, you only need a 35% win rate to be a consistently profitable trader on the longer term. Beginners mainly focus on winning as many trades as possible and it is totally understandable, because we have all been there. "The more trades I enter, the more money I will make" principle has destroyed many trading careers. The explanation to the "Why?" question is pretty simple: when we are new to trading, every win gives us euphoria and makes us think we are the rulers of the market. Guess what happens next, the market hits back, puts us in a position where we are stuck in a losing streak, and humbles us enough to quit trading and think it does not work. As we get more experienced, we lean towards the "Less is more" principle and believe that quality will always be over quantity. As an instance, we have orchestrated 2 scenarios on the graph. The example on the upper side of the screen shows how our trader has a 80% win rate but has yet failed to remain in profits due to the fact that he does not have a solid risk management plan. On the opposite side of the road, we have Trader B who is able to remain in consistent profits by winning only 20% of the executed transactions. All those minor losses that he made got covered by one big win, and as long as he keeps following the current risk management policy and strategy of his, he is sure that he will be consistently profitable in the long run.
BITSTAMP:BTCUSDEducation
by Investroy
11
USD/CHF: a short-term "SELL" is on the wayAs it can be identified from the higher-timeframe graphs, the price has formed some sort of a triple top, which is a sign of incapability of a bullish break. From here, we are expecting for the price to perform a solid, potentially a 100-pip drop and reach the level identified on the graph (area of the previous Higher High that lines up with the 50% Fibonacci retracement level drawn from the bottom of the 0.922 impulse. The overall sentiment remains bullish, however, it would be beneficial to profit from this short-term hedge move. Wishing a green Thursday for everyone! Investroy
Short
by Investroy
13
EUR/GBP: what's the next step? A big drop inbound?Taking a look at the Monthly candle closure, we might observe that the price has printed a massive wick candle to the upside, implying that bears are in control. A massive impulsive push from the 0.876 area of support into the 0.888 level of the upper boundary of the descending channel plotted on the graph, might bring some buyers into the game, as they would well think that the sentiment might have turned bullish. However, according to our projections, the price might perform one more tap above the upper barrier and grab liquidity before commencing its drop mission and striving for the target we have plotted on the graphic. Either way, we will keep monitoring the course of events and look into executing positions once the time is right.
Short
by Investroy
6
EUR/USD: a crucial key zone to watch out forAfter breaking and re-testing the lower barrier of the descending channel plotted on the graph, we might conclude that the current sentiment for this pair is clearly bearish. Recently, the price has been ranging within the boundaries of the mini-descending channel identified on the chart, and at the exact moment, the lower barrier of the same channel (that simultaneously lines up with the crucial level of support pictured on the graph) is being rejected. From here, we are expecting for the price to experience a bounce and potentially reach the level of the previous higher-timeframe LL, borders of which line up with the 50% Fibonacci retracement level drawn from the top of the impulse. And from there, we would anticipate to witness a drop and continuation of bearish impulses. Have a great trading week! Investroy
Short
by Investroy
17
GOLD (XAU/USD): zone-to-zone trading. Another impulse pending?The massive bearish reversal at the 1960 - 1950 region has led to a dramatic drop in the price of Gold. Luckily, the price action has been absolutely fantastic and ideal for entering both short and long term trades and riding the bearish waves. We may observe how the price has been actively following the impulse + correction pattern. At the moment, we are sitting on the 1820 - 1830 level of crucial support, with the price looking ultra bearish. If things play out in accordance with the plan, we are expecting another massive impulse to the downside. The target has been set at the area highlighted on the graph. However, we will be looking into trailing our Stop Loss and securing positions along the way. Have a profitable Thursday!
OANDA:XAUUSDShort
by Investroy
10
EUR/GBP: detailed chart illustration. What is the next move?First and foremost, taking a look at higher-timeframe graphs, we may observe that the sentiment of EURGBP remains bearish for the time being. Failure to break the 0.88970 area of resistance has brought to a dramatic price drop and a seriously bearish set of DAILY TF candle closures. As we know, the market moves in "impulse + correction" phases. We have witnessed a massive drop, and now, we are awaiting a correctional move before entering SELL positions and riding the price to the downside. The 0.885 crucial level that lines up with the 61.8% Fibonacci retracement level drawn from the top of the H8 impulse has been plotted on the graph as a potential region to go short from. We will keep close eyes on the price development and look for executions around the monitored zone.
Short
by Investroy
3
USD/CHF: bearish direction. Road to 0.916?After failing to continue growing above the 0.93 area of crucial resistance, the price has managed to initiate a decent drop and close below the 0.926 zone of previous support that now acts as resistance. Looking at the higher-timeframe graphs, we may observe that the price has been able to print long and nice wick candles and reject this local area of resistance. Thus, we believe that the sentiment of USDCHF is strongly bearish and that the price will continue dropping. Our initial target has been highlighted on the graph (0.916 level of support). Once that mark is reached, we will look into adding further short positions upon a pullback/correction. Have a great rest of the day! Investroy
Short
by Investroy
11
EUR/USD: multi-timeframe perspective for the weekFirst of all, taking a look at the DAILY timeframe chart of EUR/USD, we may notice the inability of the price to break below the 1.065 - 1.068 area of support and a formation of a huge wick candle. What is more, an ascending channel can be identified and we can observe that the price is stuck in a consolidation box at the lower barrier of it. It's a "break or bounce" scenario at the moment, and we need to use the assistance of other timeframes in order to get further confirmations. Therefore, we are zooming into the H4 timeframe graph and continuing our analysis. The 1.066 area of support has been penetrated both to the downside and to the upside in the span of the past few trading days. Before the market closure last Friday, the price was able to impulse towards the North by breaking the previous Lower Low point. Technically, taking a deep look, we may notice that a Left Shoulder and a Head have been formed. Now, we need to see another Shoulder in order for our Inverse Head&Shoulders pattern to be completed and confirmed. Thus, we are having close eyes on the 1.066 area of previous resistance now turned into support that lines up with the 50% Fibonacci retracement level for entering long positions and aiming for the zone highlighted on the graph. One thing should be taken into consideration: ONLY IF the price manages to retrace the 1.066 level and form a solid right shoulder pattern, our BUY idea will be valid. We are gonna be reactive instead of being predictive. Hence, we will keep monitoring the price development and patiently wait for our entry criteria to be met before executing positions. No rush. Plot your zones and wait for the price to come to you. Once the price is at your zone, wait for your entry criteria to be met before entering the trade. Have a great trading week Investroy
Long
by Investroy
13
Various phases of the market and identification of a trendThere is a famous saying in the world of trading: trend is your friend until it tends to bend. Following the mighty trend and riding its impulsive moves is one of the most satisfying feelings out there. There are several ways of identifying a trend and hoping on it. One group of people favours using indicators such as SMAs or EMAs for this case. Another group of traders prefers sticking with price action and technical analysis. In this educational idea, we are gonna show two techniques that can be utilised for determining a trend looking at multiple timeframes and examining various factors. First of all, for identifying a trend, we filter out all small timeframes and stick with the big ones like the Monthly, Weekly, Daily. STF graphs are filled with noise and indecision. Whereas, HTF charts show the bigger picture and make it easier for us to predict where the price is headed. Second, as we know, the market has three phases: uptrend (bull market), downtrend (bear market), range (kangaroo market). As long as the price keeps printing Higher Low and Higher High points, the market is in a bullish phase. Vice versa, if Lower Lows and Lower Highs are being formed, it signifies that bears are in control. Another method that we could utilise to determine a trend is by using line charts instead of candlesticks. Due to the fact that a line chart filters out all the noise, we get a clear picture of the ongoing trend. On the other hand, Differing from an actual trend, ranging markets are associated with indecision, choppiness, and imbalance. Such "kangaroo" markets are formed when bulls and bears fight each other over direction. This traps the price within borders of a sideways-moving rectangular range. All in all, even though the process looks simple, it can get tricky and confusing from time to time. Therefore, always and always, stick to the plan, be risk tolerant, remain disciplined and patient.
BITSTAMP:BTCUSDEducation
by Investroy
5
EUR/USD: zones are plotted. Time to monitor before executing!As the current structure stands, we are shifting our bias towards bears for the upcoming period of time. The price has been able to bounce off the 1.068 - 1.069 area of support and is making its way to the 2 important recently penetrated key zones plotted on the graph: 1.086 area of resistance that lines up with the lower barrier of the portrayed channel and the 50% Fibonacci retracement level drawn from the top of the impulse and Fresh support now turned into resistance of the 1.08 key zone that aligns with the 38.2% Fibs. Now, we wait for the price to approach the highlighted zones and match our entry criteria before we execute and look into riding the trend continuation.
Short
by Investroy
11
EUR/USD: re-evaluation of yesterday's analysisInitially, we were expecting for the price to re-visit the 1.093 area of resistance before initiating a full-scale drop and reaching the 1.07 area of crucial support that aligns with the 0.618 Fibonacci retracement level. Now that the price has nicely lined up at the local support level, we are awaiting some confirmations and a nice bottom formation before executing long positions and aiming for the level plotted on the graph (lower barrier of the broken channel that acts as resistance now)
Long
by Investroy
9
EUR/USD: a 140-pip upside movement is pending. Do not miss it!After initiating a massive drop from the 1.10330 area, the price has been declining ever since. As we know, the price moves in phases, meaning, after a massive impulsive, a correctional leg is needed. Currently, the price is sitting on a crucial area of support and we are anticipating for a short-term bullish phase to kick in, drive the price up, reach the zone illustrated on the graph, form another shoulder, then potentially, continue heading towards the south.
Long
by Investroy
16
USD/CHF: a textbook H&S pattern has been formed. Time to drop?🧙Monitoring the H8 timeframe of USD/CHF, we may notice that a number of confluences has lined up nicely for a short bias. First of all, it can be observed that the price is trading within the borders of the descending channel plotted on the graph. After forming for a whole week, the price has been able to print a nice Head&Shoulders pattern around the area of the upper barrier of the channel. What is more, the neckline of the formed H&S pattern neatly aligns with the 0.618 Fibonacci retracement level and it has nicely been rejected. After some lower-timeframe pullbacks, we are expecting for the price to continue its downside movements and drop all the way down and reach the level highlighted on the graph.
Short
by Investroy
10
USD/CHF: multi-timeframe observation. Where are we headed next?Looking at the Daily timeframe chart illustrated on the left-hand side of the screen, we may notice that the price has printed a massive DAILY rejection wick and failed to break above the crucial area of previous support that now acts as resistance. Zooming into the H4 TF graphic, it can be inferred that some sort of a descending channel has been formed and the price is currently located at the upper barrier of it. From here, we might head down and reach the recent Lows as plotted on the graphic. Executions should be made upon more confirmations and further price development.
Short
by Investroy
5