Showing posts from May, 2014

Euro Usd - Breakout Short or Head-Fake to go Long?

The favourite currency pair for traders has been meandering within a Pennant on the Daily Chart for some time and now looks set to start a sharp breakout short. However, with the fairly weak nature of the candles that have broken the Support area, a false breakout to head back long could surprise traders with short positions. If this reversal were to take place, it could mean the start of an even larger breakout long from the major Pennant on the Weekly Chart. Since the end of the sharp gains for the USD during the period of risk-aversion in 2008, the pair has moved within a large consolidation on the Weekly Chart. Several waves of uptrends and downtrends have taken place over the last 4 1/2 years to form the Pennant we see today. The most recent wave inside this consolidation has now taken it above Resistance, where we find the smaller Pennant of the Daily Chart.  WEEKLY CHART DAILY CHART Th

200-Pip Targets Still Hit During Financial Crisis, Using Methodology

During the infamous Financial Crisis of 2007-08 and its aftermath, many trading strategies began losing money because of the dramatic increase in market volatility. Methodologies that functioned with very few hiccups before the Crisis, were no longer profitable and could not adjust to the new scenarios that unfolded over subsequent years. Nevertheless, the methodology outlined in the Trading Manual held firm despite the market turbulence experienced during that time. The methodology uses Price-Action patterns on the Daily & 4 Hour Charts to identify high probability trades that provide between 100 and 200 Pips. The setups that provide these opportunities exist during normal periods of market activity as well as heightened periods of volatility coinciding with safe-haven investment flows. The European Sovereign Debt Crisis and the 2007-08 Financial Crisis stand out as strong examples of factors that lead to increased volatility. Since the formation of consolidation te


BEAR CROWN SETUP TO SEND PAIR SHORT The popular Candlestick Formation of the Bear Crown has now appeared on the Daily Chart of the AUD CAD, indicating that a new downtrend is on the horizon. The Left and Center Tips were formed several weeks ago while the currency was still in an uptrend, while the Right Tip was formed recently following the break of the uptrend line. DAILY CHART There has now been a bearish breakout candle below the Support of this Range that is providing a potential entry signal to take part in the trend. So what could have led to this setup for a downtrend? ECONOMIC NEWS The downtrend on the 4 Hour Chart that led to the Daily Signal, started a few hours after the Reserve Bank of Australia (RBA) kept the cash rate unchanged at 2.5%. Based on the current indicators of domestic economic activity, the RBA believed there was enough stimulus in place to support growth. Nevertheless, decisions to reduce or keep interest rates unchanged