AB=CD reciprocal 1.618 swing targetAB=CD reciprocal 1.618 swing target with potential reaction pivotal points @ 88.6% - 70.7% from Fibonacci retracement. Remains bearish if price action breaks down the volume point of control.
Retracementstrategy
The Three Great Trend Trading CyclesHey Trading family! In this education post I'd like to share with you my observation of the 3 cycles that create the uptrend and downtrend.
First, trend refers to the natural movement of price action. You may know this has highs and lows. I say we dig deeper.
Highs and lows are referred to as the highest price a buyer could buy a currency while a low is the lowest price a buyer could buy a currency. This is on the consumer side.
On the trading side, a high is the highest price you'd sell a currency pair and a low is the lowest price you'd buy the currency pair.
I say we dig deeper here. There are 3 cycles that create the legs of highs and lows of a downtrend.
Cycle 1 - Trend Continuation
In an uptrend you're more than likely to become the buyer. The reason being is because you will likely see when price fluctuates up you will make more money and the move up more visible than the move down.
The flow if price naturally moves up continuing the push up to new highs thus in an uptrend we get higher highs.
In a down trend you'd more likely become the seller The move down is more visible.
The flow if price naturally moves down continuing the push down to new lows thus in a downtrend we get new lower lows.
Cycle 2- Retracement
A retracement is also called the pullback or correction. This is a sign the momentum or strength in the trend continuation movement will relieve itself and pullback.
In an uptrend after a new higher high is formed, price will pullback to form a higher low before continuing back up.You can then become the buyer again.
In a downtrend after a new lower low is formed, price will pullback to form a lower high before continuing back down. You can then become the seller again.
Cycle 3- Reversal
A reversal is the trend switcher. This is not to be confused with the retracement.
Reversals switch the full flow of price. An uptrend becomes the downtrend and a downtrend becomes an uptrend.
How to know when price has reversed?
Easy! It's not a trend line break. It's not a level break!
In an uptrend, when price moves down past the last higher low that was formed, that signals the sellers have come into the market or the base currency has lost value and price will begin decreasing.
In a downtrend, when price moves up past the last lower high that was formed, that signals the buyers have come into the market or the base currency has gained value and price will begin increasing.
Best part to remember is this...
An uptrend or downtrend is only made of the trend continuation and retracement cycle.
You won't see price reverse much on higher timeframes such as the daily, weekly, and monthly. So don't expect to see price reverse every week or month.
Simple right?
Go try this out for yourself. If you have any questions or would like to share helpful value please post it below. 😁
Thanks for reading❤️
GBPUSD | Perspective for the new weekThe GBPUSD is trading to a new session high since the beginning of last week and has reached its 32.8% retracement of the week's downward trading range as bears refused to give up. However, from a technical perspective; As at the close of the trading week price action is oscillating right within a strong demand zone that has a memory for buying power that spans over 6 years and we might be looking forward to an opportunity to join a potential retracement wave into 50 to 78.6% retracement before a projected selling opportunity within 1.26 and 1.29 area in the near future.
Risk Disclaimer:
Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.
EU 1H 50% Retracement Entry on multiple time framesUsing the analysis from the 50% retracement strategy on the 1H time frame I have entered on the 1m TF using the same retracement strategy. This allows me to enter with a significantly smaller stop loss and in turn the ability to become risk free in a far shorter space of time
15M EU 50% RETRACEMENT ENTRYDue to the Monthly TF Line in the Sand analysis I will be looking for Bearish entries above the line and Bullish entries below.
The 50% retracement strategy that I use is a very simple construct that can be applied on any time frame. It is in fact the reason for the line in sand based on the Monthly time frames most recent swing high/low.
This 15m example demonstrates the placement of the Entry, Stop and initial target of this system.
Setting the initial target at 1-2 (Risk to reward) allows me to become risk free in the most efficient way possible.
Once the 1-2rr target is met I will close 50% of my position and move my stop loss to the entry line. This action will secure profits equal to the amount risked and allow the remaining 50% of the position to potentially continue to Target two at 1-4rr.
Should Price return to stop out the position I will still have secured a 1-1 Risk to reward ratio.
