EURO AUD WEEKLY ANALYSIS ~ forex trend trading system
FALSE BREAKOUT OR PAUSE BEFORE SHARP DOWNTREND?
False breakouts from consolidation setups are a common occurrence in the Forex market and can take various forms. In the case of the Euro Aud pair, we see that there has been a break of the Support of the Pennant formed just above its uptrend line suggests the start of a sharp downtrend. However, the sideways movement taking place below this area could also be the setup for a rally to go back inside of the Pennant to resume the uptrend.
WEEKLY CHART
In many cases, the Support area is tested by a temporary pullback before the breakout resumes from consolidation. This could be the scenario developing here on its way to several hundred pips of gains for the Australian Dollar. On the other hand, the strength of the uptrend suggests that a continued move in favour of the Euro is very likely and that a rally back above Support is expected. Based on the Daily Chart, this could already be starting.
DAILY CHART
The downtrend line has already been broken and the Resistance of the Pennant setup has been breached. Further moves to the 1,5040 Support area of the Weekly Chart´s Range would confirm the start of an uptrend here and a return inside that consolidation. Nevertheless, until that bull move is more convincing, there is always a possibility that a reversal bearish on this smaller range takes place to resume the large downtrend.
The dynamic of the market continues to keep us on our toes.
The Hallmark of Accurate Technical Analysis Money ~ order flow forex trading system
The hallmark of accurate Technical Analysis is the ability to spot market movements several days and weeks ahead of other Traders for larger trading gains. This puts you at a significant advantage when it comes to trading these expected moves, while confirming the superiority of your Methodology. A few examples of Chart Forecasts using only Candlestick Patterns and Signals shows how this accuracy can be achieved to provide real results, without the use of Statistical Indicators or Economic Analysis.
On July 1 this year, there was a Bullish Consolidation Breakout on the AUD USD that appeared to indicate the continuation of the strong uptrend in place. This would possibly have taken us to the 0,9757 Resistance of October 2013 and provide strong Day Trading and Swing Trading gains.
DAILY CHART - BREAKOUT
DAILY CHART - EXPECTED TARGET
However, this would gave way to a strong Bearish Reversal Candle that took out our Stop Loss when we entered to go long.
DAILY CHART - FALSE BREAKOUT
With this sudden change, one had to now re-examine the Currency Pair to determine if it would attempt to rally once more or start a Bearish trend in favour of the US Dollar. Based on the range and the nature of the candles of the previous trends since July of 2013 (Section 5 - Consolidation Trading on the Forex Market)and this most recent False Breakout, the pair was now more likely to decline within the context of a large Pennant Consolidation.
DAILY CHART - CONSOLIDATION FORECAST
This expected decline to Support eventually began on September 9th when a Bearish Candle broke the Support of a Consolidation setup. This would lead to a sharp 600-Pip decline over 3 weeks, completing the formation of the Pennant with the 2nd Resistance point.
DAILY CHART - CONSOLIDATION BREAKOUT
DAILY CHART - LARGE PENNANT FORMED
Since this setup was in sync with the Methodology, my clients were able to take advantage with a 148-Pip trade between the 11th and 17th of September.
TRADE SETUP
DAILY CHART - AUD USD TRADE RESULT
Live Trades executed on Dukascopy Platform
The AUD NZD was another pair that offered a profitable trade in line with our strategy. It also formed another Consolidation pattern a few weeks later that was in line with my analysis.
On August 25, 2014, there was a brief Bullish breakout from a Consolidation pattern on the Daily Chart that allowed my clients to capture 69 Pips, just ahead of the reversal a few days later.
DAILY CHART- AUD NZD PENNANT
DAILY CHART - AUD NZD 69-PIP TRADE
Given the large size of the Pennant that was being broken, most analysts would have expected the move to last for several weeks and provide hundreds of Pips in trading gains. Fortunately, based on the parameters of my Methodology, my clients would not have been caught by this reversal. Our targets are always set to anticipate these pullbacks in the market regardless of the long-term forecasts.
These targets are at major price points in the market that either lead to temporary pullbacks before the breakout continues or reversals in trend direction. Since one can never be certain about what will take place at these areas, we always exit there for large, assured, short-term gains (Section 6 - Consolidation Trading on the Forex Market).
As this reversal continued, the nature of the candles suggested that the pair would not go back inside of the Pennant but would form a smaller Consolidation above the Resistance (Section 5 - Consolidation Trading on the Forex Market).
DAILY CHART - AUD NZD FORECAST
Trade executed on a Demo Account, but too Risky for a Live Account
As can be seen in the chart below, our expected formation has now materialized. A Pennant has now been formed that could give way to another Bullish breakout for sharp Aussie gains.
DAILY CHART - AUD NZD PENNANT FORMED
Finally, the CHF JPY whose pattern of Consolidation reflected the ongoing story of low liquidity and market volatilty, was also projected to decline. This followed yet another False Bullish Breakout attempt above its Resistance boundary.
DAILY CHART- CHF JPY PENNANT BREAKOUT
DAILY CHART - CHF JPY ENTRY SIGNAL
This reversal was expected to lead to a decline to the Support area at 111.91. Trading this movement was possible and my clients were able to capture 76 Pips of this decline after a small initial loss.
TRADE SETUP - CHF JPY
DAILY CHART - CHF JPY RESULT
SUMMARY
The accurate analysis of these major chart patterns can be done without Statistical Indicators or Economic Data that are usually late to the party. This market has a predictable cycle of patterns and signals that are seen across the Forex Market every day and for all Currency Pairs. Once they are identified and analyzed with the right set of Technical Parameters, your forecasts are more likely to match up with actual market movements- movements that can be traded for large and consistent profitability.
USD JPY WEEKLY ANALYSIS ~ tro forex trading system
USD JPY HEADING TO PENNANT RESISTANCE
Having formed a Pennant on its Daily Chart, the pair looked to have been headed towards the Resistance area of 103,80 after turning at Support. However, there has been a bearish U-turn mid-way the consolidation that could mean one of two things - a Double Bottom formation at Support, or a break of Support for a sharp breakout short.
DAILY CHART
DAILY CHART- BULLISH SETUP
DAILY CHART - BREAKOUT SHORT
The bullish scenario would provide a little over 100 pips in potential gain, while the bearish scenario would give several hundred pips due to the size of the Pennant. As traders, one would hope for the latter option, but for the exporters from Japan, further gains in the Yen would be the last thing they want at this time- the dilemma of market greed versus `real world´ concerns would certainly rage on.
Embarking on my Bitcoin Trading Journey Learn Basic Technical Analysis ~ trading system using relative strength forex
My Trading Experience
I first dabbled with Trading and Technical Analysis back in November 2012, when I first got into Forex Trading. Back then, I was introduced to an Automated Forex Robot that could rake in passive income of about 5-10% a month, and used a Martingale (doubling) strategy for trading. In less than 3 months, half of my account went bust because I was using too high of a risk-reward setting, coupled with a highly volatile GBP/USD market on the 4th of January 2013.
I did a fair share of Finance courses during my Business studies, and had a basic understanding of the Equity and Forex markets, and thought that I knew what I was doing. But oh was I so wrong! After this setback, I began to learn more about Technical Analysis to supplement my Auto Trading, and more importantly, to really understand what I was investing in.
I continued using the Forex Robot for the next 10 months up till November 2013, as I began to shift out my funds into Bitcoin after finally turning a profit in August. Since then, I have been following Bitcoin more closely, and have been super interested in learning how to trade Bitcoin.
.@steveomarburg I would if I had more $$$. Im ALL-IN #Bitcoin. — Alvin Lee (@onemanatatime) January 8, 2014
Getting Started Back when I was learning more about Forex trading, I went to Forex school at Babypips, and learnt some of the fundamentals of chart reading and trading, such as reading candles and trading concepts. Unfortunately, I dropped out somewhere through Elementary School, after they lost me with all kinds of different indicators I could not see the use for. On the other hand, I still do think Babypips is a fantastic resource, especially for beginners who are keen to learn how to trade and better understand the Bitcoin market. More recently, since I made my first few panic buys and sells and lost some Bitcoins trading, I have been picking up again on Technical Analysis and Trading strategies. Im not an expert at this, and neither should you take my words as investment advice, but Im here to share some of my thoughts on Bitcoin trading, and I hope it is of great help to you!
If you have any questions, feel free to tweet me at @onemanatatime.
Learn the Basics of Trading
If youre a beginner trader, first thing you should learn is to read charts. Chart patterns signal to traders that the price of a security is likely to move in one direction or another when the pattern is complete. Id like to bring your attention three chart patterns that will appear very often. I also took the time to show you how these relate to Bitcoin trading with the charting tools I use on TradingView. Enjoy!
Head & Shoulders http://www.investopedia.com/university/charts/charts2.asp
Secondly, another analysis tool I think is very useful, is the Fibonacci Extension. Fibonacci is pretty tough to understand, and more so to chart with Bitcoin due to the lack of available tools which allow for it. But in essence, the Fibonacci sequence is a unique string of numbers which adds the sum of the two numbers before it, and is the deravitive of the Golden Ratio. People like to call them the "magic" numbers, and very aptly so, as theyre present all throughout Nature.
Jason Stapleton shares the secret of Fibonacci Trading; that is to understand that Fibonacci (extension) is simply a tool. But when employed properly, and in conjunction with other indicators, it can present enourmously profitable, high reward low risk trading opportunities. Watch his video here:
Lastly, Id like to share a trading pattern called the Elliott Wave Principle. It emphasizes an understanding of Investor Psychology, and explains why prices fluctuate in zig-zag patterns. If you thought Fibonacci was tough to understand, lets have Babypips put this in perspective. Babypips teaches Fibonacci in Elementary school Grade 3, whereas Elliott Wave is taught in "Summer School". In that sense, Eliott Wave would be a great concept to learn and understand, as a supplement to your foundational understanding. Click on the links above to read and learn more about both theories!
Bitcoin Trading
By now, youd probably be saying: "Sure, these resources all give me a good basic understanding of trading markets, but how does that apply to Bitcoin?" Since learning the fundamentals, Ive been looking around for good resources to learn Bitcoin Trading from but with not much luck. Here Ill be sharing some handy videos to guide you on your Bitcoin trading journey.
I didnt get around to learning proper Bitcoin trading strategies, until early December when I chanced upon Chris Dunns first Bitcoin trading video and prediction.
I watched @ChrisDunnTVs first Bitcoin prediction video on the 6th of December 2013, and the rest of his "How To Day Trade" 5 part series videos. Somehow, I had a gut feeling that he was the ONLY guy trading Bitcoin who actually knew what he was talking about.
Guys, #bitcoin is already up 20%+ from my buy zone last night. Read this post to profit! http://t.co/CLS2Jkv7UU pic.twitter.com/dY3aGHkJhR — Chris Dunn (@ChrisDunnTV) December 7, 2013
Another spot-on prediction as Bitcoin falls to $817 Bitstamp. "@ChrisDunnTV: Scaling into a short position for BTC - http://t.co/HpkdB6KnZL" — Alvin Lee (@onemanatatime) January 7, 2014
Since then, hes made and nailed 5 back-to-back Bitcoin predictions, each with 15-30% profit. Watch his last prediction play out with immaculate precision. Watch the video here: Incredible Live Bitcoin Trading!
Made 15% on my Bitcoin "short sell" listening to @ChrisDunnTVs tip. If youre thinking of trading Bitcoin, dont forget to stop by! — Alvin Lee (@onemanatatime) December 16, 2013
This is a long one, but heres another great video I highly recommend watching: 60 Minute Stock Trading Blueprint Webinar.
If you liked his content, watch his other videos on his YouTube channel and follow him on twitter @ChrisDunnTV for the latest updates!
Lastly, I also very much believe in Chris Dunns trading perspective. I think more than analyzing news articles, or technical analysis, the most important aspect of trading is to understand the market sentiment. Hence, I also want to highlight how many Bitcoin traders are currently looking at certain time frames (e.g. in 12 hours from now) to determine a price for entry. Id just like say that thats not going to work! Instead of narrow time frames, and random $ amounts; think about Price-Action, Resistance, and Support.
Another piece of advice, is to match the Price-Action of both a long term-time period as well as a short-term one, when trying to make judgement calls. I personally use Bitcoinwisdom.com for reading a chart, and use anything from a 6h to 1d Time Interval for a long-term period, and anything from a 5m to 30m chart for short-term analysis.
.@supershares $777 or lower? who knows. 12h time frame is too narrow. think price action, resistance & support; not hours and $. — Alvin Lee (@onemanatatime) January 8, 2014
Past Trades & Predictions
My very first prediction about Bitcoin came in my first blog post about Bitcoin hitting $1000 by the end of 2013. I wrote the post on 14 November 2013, and you can read it here: Is the Bitcoin train ever turning back? $1000 by year end?
Then on 28 November 2013, I wrote another blog post about an incoming Litecoin crash. I related the price surge during that time, to the Bitcoin bubble of Aprils Cyprus fiasco. At that time, I had no clue how to judge resistance and support, but interestingly, the wisdom of crowds (more or less) pulled through with the right answer. Litecoin peaked at $50, before crashing down over 50%.
Since I began learning to trade, the added market understanding has given me a better insight into estimating a fair price for altcoins, as well as to judge support/resistance levels to look for entry/exit points. I have made a few spot-on Altcoin predictions of my own over the last weeks, as you can see on my previous blog posts about WorldCoin, NXTcoin, and DogeCoin here and eMunie and EarthCoin here. Follow me on Twitter or my blog to get the latest updates on Altcoin opportunities!
And last but not least, here was my first Bitcoin prediction. Click the link to see how my first prediction panned out on TradingView. I didnt know what I was doing, but I guess thats what they call Beginners Luck. ;)
Thanks @baihk. Its not my first, and definitely not my last. Im still learning too! Here was my first w/ 25% gain https://t.co/FQEIiBLI8O — Alvin Lee (@onemanatatime) January 8, 2014
Todays Prediction I think Bitcoin will be looking to retest the $544 support level of Bitstamp, before picking up for a new All Time High. But before we can go the Moon, Earths gravity is causing a small nosedive into the $650-$720 levels, and Ill enter if my Sell order goes through at $850.
$BTCUSD chart: Bitcoin looking for a retest of the $544 levels, before new ATH.. http://t.co/c0B1F0Of4B — Alvin Lee (@onemanatatime) January 8, 2014
And heres a friendly reminder about following Bitcoin or Altcoin predictions:
also dont reply to my tweets from 8 hours ago saying "thx for the tip, buying now!" are you fucking insane this is a highly volatile market — CryptoCobain (@CryptoCobain) January 8, 2014
Follow me on TradingView as I create new charts with Buy/Sell opportunities, or Twitter @onemanatatime for the latest updates! Dont forget to enter your vote for the Bitcoin price poll on the right column of this blog. Heres my vote, whats yours?
With that, Id like to end off with this; good luck trading, and HUAT AH! And heres a quote from The Alchemist, by Paulo Coelho.
“Every search begins w beginners luck. And every search ends with the victors being severely tested." Paulo Coelho. pic.twitter.com/SQHXxc9cD1 — Alvin Lee (@onemanatatime) January 8, 2014
More info for Embarking on my Bitcoin Trading Journey Learn Basic Technical Analysis ~ trading system using relative strength forex:
NZD USD WEEKLY ANALYSIS ~ forex tsd trading system
NZD USD AT MAJOR CROSSROADS
This popular currency pair has started to move sideways, forming a Pennant Consolidation pattern on its Daily Chart. This follows a rally of 740 pips from the low of 0,8050 on February 4th this year. Coinciding with this area is the Resistance of an even larger Pennant on the Weekly Chart. That Resistance connects the high of 0,8841 of July 30, 2011 with 0,8675 of April 30th, 2013.
WEEKLY CHART
DAILY CHART
At this juncture, we could either see a break long above this area to continue the current uptrend or a break short for a new downtrend. Until that break takes place, movement with this 130-Pip consolidation could provide short-term gains for the aggressive trader.
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