Video Analysis of the Daily and 4 Hour Charts

Hey man thanks,

Ok, less trend lines would make it easier?

Well based on how I use Price Action, it requires these Trend Lines in order to explain important movements such as breaks that take us from one Trend Line to another etc. and to show those who use them how to draw them.

However, if some of these are not necessary in explaining whats happening then I can adjust.

I understand that zooming in and out of the trendline according to the different timeframe analysis is essential, just that a little bit of too much for newbie or amateur trader.

Is there any way that we can just use the trendline at the larger time frame and keep the same as reference for trading, just my query. Thanks.

VERY educational. You do a great job of explaining the all the possible scenarios to keep an eye out for. Please continue to keep this thread active as I feel it may be one of the highest quality educational threads on this board.

If I may ask, what do you think about the pennant that appears to be forming above .6500 on the NZD/USD pair?

Hey RoyalBlood,

I understand your concern.

The problem is that when I zoom in, there are additional Trend Lines that are formed that may not be visible when I zoom out. So just using the trend lines from the wider view may lead you to miss important things taking place such as Trend Line breaks on a closer view.

As you get used to them, it will become easier.

Regards

Hey PoPip thanks for the good words. How is your trading going and what strategy do you use?

Yes that is a Pennant being formed. I actually anticipated it on Monday. It was either going to be a Pennant or Double Bottoms…



I was actually leaning more towards it being a Pennant…




…one of the “tricks” or dynamics of the Forex that can lead to losses.

Right now it could lead to a breakout to continue the Breakout from that Range Consolidation or rally briefly above the Downtrend Line…

PipPop

I had also forecast a similar but much larger Pennant setup to be formed on the EURO USD as far back as June this year…


…which seems to be happening/happened now…


The market tends to give us a heads up as to when these patters are going to be formed (such as weak breaks of CTLs in the NZD USD example). Another signal is when we have 2 consecutive waves of Bullish and Bearish Waves of the same size that appear at the end of a large trend…


…that eventually lead to the Pennant being formed…


This is what I had seen in June and what I expected to be formed.

Trading within them is always possible such as in this example here…


…but sometimes the waves within them are too volatile to be worth the risk. Right now I am waiting on the right signals to trade this EURO but so far it looks as if I might have to forgo it.

Trading within them can be done several times until the breakout takes place which will offer even greater profit potential.

[B]Duane

DRFXTRADING[/B]

Thanks for the analysis! Very informative.

My current strategy (forward testing on demo) is identifying S/R and recent trends on daily charts, and using price action signals on 4 hour charts to enter with the trend as a pullback to the trend line is seen. I’m not currently trying to trade breakouts, but I am keeping an eye on the subject and studying them to possibly trade them in the future.

ok cool.

Support and Resistance can be good tools…if you catch the best ones you can definitely get Pips from them. Problem I always had was knowing whcih of them would be strong enough and how many Pips I could get from them. Another issue was how far to place the Stop Loss since some S/R required only 10 Pips while some required 50 Pips…was difficult to create a strategy based on these moving parts.

What are your targets and Stop Losses?

Breakouts are very powerful setups, and once you analyze and trade them correctly with the right strategy, they can be a good weapon in your arsenal.

Yep I ran into the same issues with support and resistance early in my studies. Now I only mark really obvious ones, especially if they coincide with a psychological level. I’ve found trend lines to be much better indications of where price is likely to reverse, so S/R only come into play when I’m setting stops and targets to determine if the trade is too risky.

I’ve been setting my orders with a 1:1 risk-reward, first setting my stop at a logical point below the trend line (for longs) or above the trend line (for shorts), then ensuring that my target seems logically reachable. Lately I have been moving my stop along the trend line to reduce my risk while still allowing for price to bounce in my favor.

I still have a ways to go before I understand even half of this stuff, but these videos are brilliant! I really appreciate the way you go through these trading situations and fully illustrate the concepts with multiple examples and show the varied opportunities involved in these situations. Cheers!!

DrAndy

Thanks man, glad I can help. There`s much more where that came from, but I can only show you the free stuff…lol

How´s the trading going and what strategy you use?

Hey PoPip,

Yes, Trend Lines are good Stop Loss areas/better than S/R once the trend is going to continue.

with a 1:1 risk-reward
,

target [B]seems[/B] logically reachable
.

Why only 1;1? you shouldnt be aiming to get Profits equivalent to Losses. Aim Higher. This will give you a cushion for losses.

What determines your targets now for this 1;1 ratio? it sounds as if its not clearly defined as yet and that it changes along the way.

Ideally, targets should set based on a firm set of rules. It is true that the actual number of pips can vary depending on what the market offers. But the reason for choosing a target should be based on a firm set of criteria.

Good luck.

…Yet another example of how Consolidation Breakouts with Large Candles lead to False Breakouts…another trap of the market…

EURO USD looked set to break higher with this Large Candle…


…but I expected it to at least pause before either moving sideways or reversing sharply…


This is because these Large Candles, as attractive as they are, hardly lead to successful breakouts.

Figuring this out and identifying the types of Candles that actually lead to profitable breaks was what I had to do…


I cant tell how much money was lost and time spent in spotting the right signals to trade- made a big difference in results.

Although this has taken place on the Daily Chart, these Large Candles are seen across all time frames as well. Its not so much the size in terms of Pips but relative to the other Candles on the time frame being traded. So whether you are a Day or Swing Trader, they will appear from time to time.

Once you can make this distinction, it becomes much easier to avoid these traps.

Duane
DRFXTRADING

Hey all,

Range Trading opportunity on the NZD CAD.

Its now at the Resistance boundary and could be headed back down with a break of the 4H Chart Trend Line.

The key is the type of signal that we get to start the move. Both the Candlestick Setup and the Breakout Signal that starts the move have to be strong - otherwise, gonna be risky.


The Setup and the Signal may appear within the next 12 hours and could offer 150 Pips.

Duane

Following up on the previous analysis, we`re now seeing the pair showing signs of starting a reversal.

Strong Bearish Signal given at Resistance, but not enough to start the move.

We gonna need either an ABC or Bear Crown/head and shoulders pattern to get going.

Hey all, been awhile, back with you.

These Videos will now show you examples of a more aggressive Swing Trading approach based on my current Methodology. They will show how you can take advantage of profitable movements in the market each week that can provide an average of 150 Pips per trade. As long as you know which trading rule to apply to the trading opportunity presented, you will be able to profit from these trades on a consistent basis every month.

There are now 5 Swing Trading Strategies that I use which will be showcased here which you can easily apply to your trading.

[B]

  1. Trading Within Consolidation using Support and Resistance

  2. Trading Within Consolidation using Daily Chart Signals

  3. Trading Within Consolidation using 4 Hour Chart Signals

  4. Trading Strong Trends/Consolidation Breakouts

  5. Trading Slow Trends/Consolidation Breakouts

[/B]

As Swing Traders using Price Action/Candlestick Signals, a big challenge when Trading within Consolidations is figuring out which time frame to use for entry or if we should simply enter at the S/R areas. There are several Technical Factors that determine which strategy to use but one of them has to do with the size of the Consolidation. For small ones such as in the Video below, volatility at the S&R areas is minimal, making it easier for us to enter there without waiting on the Candlestick Signals. For larger Consolidations, however, Daily and 4 Hour Chart Signals have to be used given the increased volatility/spikes at these areas.

There are some Trends and Consolidation Breakouts that are very fast and are characterized by Strong, Large Candles while others have Small, Slow Candles. These require 2 Types of Trading Strategies to ensure we aren’t affected by unexpected pullbacks that lead to losses.

These Trades will also be shown in the Dukascopy Trader Contest to show how they perform under a competitive environment. By targeting an average of 150 Pips per trade twice a week, it is possible to generate 1200 Pips each month - very large turnover that can provide strong Short Term and Long-Term Gains.

Any questions and comments, fire away.

102 PIPS GBP CAD - TRADING WITHIN CONSOLIDATION USING SUPPORT AND RESISTANCE



Regards

[B]Duane

DRFXSWINGTRADING[/B]

[B]OBEYING THE HOLDING PERIOD RULES FOR TRADES[/B]

There is nothing more frustrating than seeing a strong floating profit turn into a loss in a matter of minutes. This can be avoided by establishing and obeying a rule for how long you hold your trades before deciding to close them. Sticking to this rule will help to minimize the losses due to holding out for more Pips than the market is going to give us.

This recent trade on the GBP CAD which had to be closed at the end of my Holding Period for this type of trade shows how crucial this rule is to trading success.

Once you obey this rule, consistent gains will be a regular part of your trading.

[B]
Duane

DRFXSWINGTRADING[/B]

After forming the Pennant Setup on its Daily Chart as predicted several weeks ago, this pair could provide us with a trade in the next couple of days.

We will either see it head back inside of the Pennant and take us to Resistance or U-Turn at Support to continue the Bearish Breakout.

If it gives a Bull Candle to start the reversal, it would be an ABC Signal, which as you know leads to Sharp Movements and is a common signal seen when it comes to False Breakouts. If it continues bearish however, it would have to give us a strong Bear Candle that breaks the Counter Trend Line just below Support. Many times when a Consolidation is being broken, we will see the pair breakout initially, then pullback to test the broken S/R before U-Turning.

(Apologies for the fuzziness - the video is actually clearer than this thumbnail)

Once we get a signal in either direction, we are likely to be able to capture at least 150 Pips as long as the setup we see on the Daily & 4H Charts meet our entry rules.

So by Wednesday the latest we should see a signal to get things going.

Get ready to trade it!

[B]Duane

DRFXTRADING[/B]

Hey guys,

We have a scenario now on the GBP USD where the Support of its Pennant on the Daily Chart is now taking place. Based on the theory of Consolidations, it could either continue Bearish or reverse to take us back inside of the Pennant.

There are certain technical factors and signals that tell us which of these 2 scenarios will take place and once you know what these are, you`ll be able to trade them profitably every time. This helps to avoids situations such as:

1- Jumping into the market at the first sign of a break of the Pennant only to see the market reverse sharply back inside.

2 - Start trading when we see the market showing signs of heading back inside of the Pennant only to see it U-Turn sharply to continue the breakout.

Both cause losses on a regular basis for traders, but they can be minimized once we know what those factors are that predict which situation will be the correct one.

[B]Duane

DRFXTRADING[/B]

Hey everyone,

EURO USD looks to have broken the Support of the large Pennant on its Daily Chart at 1,0815…


From here, it will either continue lower in favour of the USD or reverse to head back inside the Pennant.


(Video is much clearer than this thumbnail- not sure whats up with Babypips…lol)

Ultimate direction is going to depend on the signal we get on the Daily Chart - either way, it will be very profitable as breakouts from Consolidations and False Breakout Reversals are usually fast, providing large Pips in a short time.

Duane
DRFXSWINGTRADING