AUDUSD 26/05/17 - Daily - Newbie seeks input

Hi,

this is my first post on here, and I’m also quite new to Forex and thought i give it a try since I found it quite interesting. Since I’m new, I’m still trading on a demo account. I’m not looking to make money fast, just some descent return…

Actually, I was reading about it for quite some time now and prefer naked trading , pure price action without any indicators.

I found, in my newbie eyes, an setup on the AUDUSD Daily chart which i find quite interesting. I would like to know your thoughts on it. I know, it is a topic to agree to disagree, otherwise the market would only be moving in one direction :slight_smile: But at least let me know, if you can follow my thoughts on it and if they are logical

Here we go…

the “setup” I’ve seen on the Daily:

We are in a bearish trend with lower highs and lower lows, BUT the trendline has been broken, eventhough we failed to do a higher high. Now the price is retracing with a strong bearish engulfing pattern to the confluent (broken) trendline and recent swing level and after the strong bearish day shows rejection of this price level.

On the twelve hour (i don’t go any lower than this)

We see the broken trendline with two rejections and a small piercing pattern (last candle).

My trade idea on this:

Go long at the high of the rejection candle for a Risk/Reward of 1:3

My mainly concern are the the two harsh rejections in the eclipse, which seems to be a strong resistance level.

What do you think of the idea? And bare in mind, I’m really a newbie :slight_smile:

Regards,

Philipp

hi phillipp, I invite you to read one of my latests posts where I place my “week ahead: AUD/USD Bearish” analysis. I am sorry you are right, the market is driven by humans and we will disagree or agree, in this case I am “bearish” The key reason (but I suggest to read my post for details) is that the day engulfing candle happened at the 786 fibonacci level which is a strong resistance (or support) level but not only it is a 786 it is also a 61.8%, 50% and even a 38.2% convergence of the fibonaccis. SO YES I agree that it has “broken the inner down trend line” however based on hundreds of trades and back-study I have found that a 786 after a broken trend line is a “key area to check for” as the market can just be slowing down is trend moving from a fast line to a slower line but it doesn’t mean that it is reversing yet… But please feel free to review my detailed post on this and see what you think

On another hand, I am however (in the very short timeframe) expecting for the a/u to “rally up” to a 618 or 786 fibonacci in the 4-hr chart. How much would this be, would this be enough for a 1:3 r:r? I don’t know, have a look at my thoughts and you can work it out…

anyway, I am only giving my thoughts because you asked and I love trying to help I have been trading for a while now, as per my posts, I am at least in profits by over 1,000 pips in 90 or so trades, which is not great, but it is quite profitable based on the value per pip. I only risk 30-50 pips which at $0.12 per pip allows me to buy reasonable sizes and having a $12 per pip as you will find out it is not about how many pips you can collect but how much each pip is worth! as someone here also confirmed to me…

happy trading! :slight_smile: and welcome to this wonderful life of forex trading I too LOVE IT!