Video Analysis of the Daily and 4 Hour Charts

Hey all, back with you.

Latest trade gave us a 149 Pip gain on the EURO USD as it headed to Support of Pennant on Daily Chart.

This was the overall setup as seen in this chart and the Video Analysis


Entry took place using the 4 Hour Chart, with the target set to just above the Support of the Daily Pennant.


After a few days, target was hit.



Overall, Return from these Strategies is now 25%


This trade continues to show how we can better results by focusing on the larger time frames. These offer larger movements and more reliable signals to take advantage of these trends.

Stop Losses should be placed at areas that will protect trades against temporary pullbacks before our targets are hit. Support and Resistance and Trend Lines - once strong enough - great places for Stop Losses.

MAIN TECHNICAL HIGHLIGHTS OF TRADE

[B]

  • Trading Within Consolidations

  • Using Strong Daily Candle Signals

  • Using Strong Stop Loss Areas on the 4 Hour Chart

  • Waiting Patiently Until Target is Hit

  • Strong Gains Possible with Swing Trading[/B]

Regards

Duane
DRFXSWINGTRADING

I think that Yen will likely depreciate in value over the coming week because of the policies coming from the BoJ who are actively trying to drive the Yen down here’s an article I read last week about various currency pairs and their outlooks.

What about the growing risk-off environment we’re seeing across global markets? How would a ballooning of that strategy impact your opinion?

Its funny…spent 5 Years studying Economics, 2 Years at my Central Bank, competed in Fundamental News Trading at Dukascopy…for moves of 30, 50 Pips, yes, but for moves of 100 - 200 Pips, news doesnt matter.

If a news announcement is gonna have an impact, just have to wait until its reflected in the Daily /4 H Chart Signal. No need to actually predict the news. Just wait for the signal and trade it. None of my trading needs to look at news items. Everything is reflected in the Candlestick Signals.

WHY DAILY CHART ANALYSIS IS CRUCIAL TO DAY TRADING & SCALPING SUCCESS

Now, even though I preach the benefits of Swing over all other types of strategies, I always say that knowledge of how the Daily Chart is crucial to avoid unexpected reversals on the smaller time frames. I remember a time when I Day Traded that I only had 1 successful trade out of 32 trades in a single month. Even though I had a good strategy, it was not enough without using the patterns of the Daily as the main guide.

Take this NZD CHF back in September 27, 2016. In the charts and video below, I warned about why it was too risky to start trading long despite the Bull Candle given at Support of the Daily Chart Pennant Setup.


This would have tempted many to start trading Long in hopes of a major bullish move over several days. But instead, the market reversed sharply to take out the Bull Candle and any long positions that were open.


Now this is where it gets tricky. Even though it was a strong bull candle by itself, given the size of the Consolidation, it was weak. What you´ll notice is that certain types of signals are more appropriate for certain size of Consolidation, but not for others. So you have to know which combination of Signals and Consolidations give you the green light to start trading and which are risky to trade.

Just like Indicators, there are times when Candlestick Signals will also give False Signals that lead to losses.

So this is one of many examples I´ve seen over the years that have created traps for traders. Another one that could be on the way is for the EURO AUD.

Daily Chart now giving a Bearish Signal indicating a move back inside Range…


…but the bullish move on the 30 Minute could easily tempt us to start going long in expectation of a Trend Line Break…


Even if it rallies, this is likely to be temporary and risky to trade. The better option will be to wait on a strong bearish signal to ride the wave down for larger trading gains.

Bottom Line… we gotta analyze the Daily Charts and their Candlestick Patterns in order to stay ahead of this little game…no way around it. Larger Time Frames control the rest of the market and we gotta include them as part of our trading. It will tell us the when, where and how to trade, how many pips we can get, and whether its really worth the risk.

[B]
Duane

DRFXSWINGTRADING[/B]

Hey Traders, how goes it?

Following up on that analysis above, the EURO AUD provided a good trading gain of 88 Pips.

Below is the Chart and Video analysis the anticipated this bearish move


…here is the 4H Chart Trade Entry


and the Trade Result on the 4H Chart…


…and on the Daily Chart…


Strong gain to take advantage of False Breakout Reversals.

[B]
Duane

DRFXSWINGTRADING[/B]

Hey all,

Another example of how the Larger Time Frames allow us to predict the major moves of the market…



…and here´s the video that predicted it.

Larger Time Frames and Swing Trading…best combination to make money long-term.

[B]

Duane[/B]

Recent trade on the EURO GBP shows how Candlestick Patterns on their own are powerful enough to predict and profit from the market.

[B]VIDEO ANALYSIS[/B]

Duane

Recent trade om Kiwi Dollar shows how Candlesticks are all we need.

Duane

i find your videos great. i believe that “simplicity is best” and I also agree with you that the “news” are already “priced in” and they usually show in the “candlestick charts/signals”. unless of course something completely out of left field happens that “none” knew of or expected then the analytics go out the window but this is extremely rare. i have noticed many news that came out (which I wasn’t aware of happening like the uk polls a few days back) that happened yet the market had already shown a candle signals (which I had traded) in such direction the move was of 200 pips (i was short gbp/jpy) boosted by the news but the signal was there about 18 or so hrs prior!

anyway, although I like your posts, what makes someone more readable is their results. why not post every week your actual pips results summary (like I have done in my own posts) starting with the last 100 trades, pips profits, win rate, etc in this way anyone can decide wether to follow you or not…

just food for thought
no money details are required just real live results…

I only trade 3 crosses (with some exceptions), I have a one page trading method that works for me, but I wouldn’t mind demo trading (this is what I usually do with new ideas) your forecasts but first I would love to know your track record

cheers
fxpirana

Thanks fxpirana

Yeah, Candlesticks keep things simple and they already tell what will happen before the news as you said. I´m a former Central Bank Economist and I can tell you that most of these news items are unreliable because of their short-term nature. Once you know which Candles are the most accurate/reliable, using these will be good enough.

Live Account record coming up in a few days.

I saw your thread…good trade results. What has been the overall performance with these 100 trades?

Regards

Duane

This describes the trade made at the end of last week as the pair continues to form the Consolidation Setup on the Daily and 4 Hour Charts.

[video]https://youtu.be/6GQbNcV-kpY[/video]

Once you know the Candlestick Patterns that predict these Setups, they can be traded for profit.

Duane

hi duane, yes I totally agree with you. Candlesticks keeps things so simple and furthermore, like you said, in one of your posts, for moves like 100-200 pips long term fundamentals are not required

Thanks for asking, my results were ok I just posted an update/summary and recap so to speak as the end of the challenge I placed to myself…this link should take you to the results summary. Overall +1,056 pips.
I am pleased with it, although I could’ve done better pips wise, but doubling my bank in 4 months is ok to me. Now I can move from 5% investment per trade down to 2.5% and continue betting at the same levels.

this is the link to the results.

http://forums.babypips.com/trade-journals/84693-fx-traders-challenge-100-live-trades-24.html#post818711

TRADING OPPORTUNITY EXPECTED AS NZD JPY REVERSES IN THE DAYS AHEAD

Based on the Analysis of Consolidations, Candlestick Patterns and Resistance, we are gonna see a Major Reversal taking place over the next several months. This will start with a pullback at a Major Resistance Point at 83,80 and then a False Consolidation Reversal.

Daily Chart below shows the Major Resistance at 83,80 that has been hit…

DAILY CHARTS

… and the pullback taking place as a result of hitting this Resistance, despite starting a Breakout from Consolidation to resume the Uptrend…

WHY IS IT LIKELY TO PULLBACK DEEPER?

Even though the market can simply be pulling back temporarily before resuming the Bullish Trend – “Test of Pennant Resistance becoming Support”- the nature of the current Uptrend and the previous Downtrend tell us that a Large Consolidation is being formed…

There are certain types of waves that tell us that the market is forming a Consolidation. They usually are sharp and aggressive like these…

Since the waves of the NZD JPY are similar to these above, it is very likely we will see a Consolidation being formed…

This means that a False Breakout Consolidat. Reversal is likely in the next few days, presenting a trading opportunity along the way- see video- as it starts a Major Downtrend Reversal…

So given this projection for the next few days, if a Trading opportunity present itself…

1. What Type of Daily Candle Should we Expect?

2. What Type of 4H Candle Should be traded?

3. What Type of Stop Loss Should be used and how much?

4. How long should the trade be held?

All in the next video

Duane

I really appreciate your contribution! No doubt, video tutorial is one of the most useful way of learning for the beginners! Hope this helps them! Even, I like your chart analysis! Just be consistent here!

Hey Luke, thanks man, appreciate it.

NZD JPY REVERSES AS PREDICTED AND SHOWS WHY LOWER TIME FRAMES ARE DANGEROUS

So as you would have noticed, NZD JPY is now sharply bearish as I had forecast in the previous video. Unfortunately it didnt present any setups that I liked, but since this movement is expected to continue, a setup is still possible trading short .

There were 2 Main Technical Factors behind this accurate forecast and they are the main reasons why Smaller Time Frames are dangerous…

Once you close the Smaller Time Frames for good, you are MUCH MORE LIKELY to avoid unnecessary losses and trade in the major direction of the market.

MAIN ADVANTAGES OF LARGER TIME FRAMES?

  1. Easier to See the Main Trend

  2. Easier to Spot the Start of Reversals

  3. Stable Signals

  4. Reliable Setups

MAIN PROBLEMS OF SMALLER CHARTS

  1. Easier to get surprised by major Reversals caused by the Larger Charts.

  2. Volatile Movements

  3. Unreliable Signals - More False Signals/Breakouts

  4. Smaller Range of Movement/Profits

  5. Weaker Stop Loss Areas

What say you!!???

Duane

You are always welcome! Keep it up.

THAT BULL CANDLE SIGNAL COULD BE A MARKET TRAP!

As strong as some Candles may be, they can easily lead to unexpected losses if they are traded in the wrong scenario…

When it comes to trading within Consolidations, this is a very common challenge.

While Consolidations are being formed, we can trade the Bullish and Bearish Waves that the market provides. However, we have to know the Appropriate Signals that can be traded for the TYPE and SIZE of the Consolidation being formed. Otherwise a signal that worked for you in a previous situation may lead to losses the next time you trade it.

DOUBLE BOTTOMS & ABC SIGNALS

An example of this is the case of the Double Bottoms and ABC Signal that are now seen on the 4H Chart on the EURO NZD. In the video below, I explain why these signals may not lead to a Bullish Movement that can be traded. Even if it does, it can be a volatile movement that is difficult to trade.

Ever faced this scenario where a Signal you traded successfully one day suddenly leads to losses next time you traded it?

Share it here

Duane

Hey Traders, back with you after a break to fine tune my new strategy that you will enjoy.

Previous Strategy targeted 100-200 Pips over 5-7 Days and while this had some benefits, it was much too slow in terms of Returns (40% Annually).

Now, new strategy aims to provide 30% Monthly…

STRATEGY IN SUMMARY

1. 50-70 Pip Targets

2. Maximum Stop Loss of 45 Pips

3. Maximum Holding Period of 24 Hours

4. Daily & 4 Hour Charts used for Signals and Entry, respectively.

5. Candlestick Patterns and Signals used with Trend Lines & Consolidations for Market Direction and Entry

6. FXCM Charts used for Trade Setup and Signals (based on the New York Close of the Daily Chart)

7. Live Trades take place on my FXPRO Account (better interface when trading - can see % Risk and Return expected on trade & provides email alerts so you dont have to check your charts)

USD JPY TRADE

This took advantage of the False Breakout Reversal on the Pennant of the Daily Chart.

Daily Chart shows the Bullish Reversal Signal that indicated the start of this Reversal, following the failed Bearish Breakout…

DAILY CHART REVERSAL SIGNAL

Based on the theory of False Breakouts, it was expected to at least hit Resistance to then Breakout…

As such, after the 4H Chart provided a signal, entry took place with the following setup…

Stop Loss was placed below the Candlestick Formation, with Entry at the close of the Candle.

At the end of the 24 H holding period, market rallied as expected to provide a small gain of 33 Pips - equivalent to a 3% on my account. Even though target was 60 Pips and a 6 % Return, I had to exit for a smaller gain as the market did not rally to the target by the end of the 24 Hours - nevertheless, profit.

The Video Analysis of the trade can be seen below…

MAIN ASPECTS OF TRADE

  1. False Breakouts can be traded aggressively.

  2. Key is to know the Right Signals and Entry Setups to use.

  3. Short Trading Targets within a Short Holding Period provide faster turnover and larger returns

  4. Daily and 4 Hour Charts provide the most reliable Setups and Signals

  5. Once Stop Loss placed at a Strong Area, no need to monitor the trade - Set It and Forget It. This is much easier if your Live Account offers email alerts.

These alerts allow you to know when the trade has been closed so that you arent tempted to interfere with the trade - NO EMOTIONS!

6. Always Exit Trades Religiously at the end of the Holding Period - just in case market reverses sharply!

So thats the trade in a nutshell. On average 1 to 2 of these setups appear each week. I dont need to trade every day since the next trade is just a few days away and will provide a Strong Rate of Return because of the Wide Risk Reward Ratio - more than justifying the wait.

Sounds good?

Look out for more later this week.

Duane