Hello once again boys and girls,
Once again I have attempted a top down analysis of a pair. comments welcome
Here we can see on the Daily that there is stiff resistance to the Dollar devaluation against the AUD, there are gartleys at almost every XA leg. The USD is one of those currency that really does not want to weaken without a fight.
bigger pic: http://i.imgur.com/ASFCfg3.png
If we take a look at the hourly [chart below], we can see again that there is even more opposition to the USD weakening. that first purple gartley was both a TmoneyBags pattern and a scott m carney bat. by combining both techniques along with candlestick analysis I was able to determine that this was a good place for a long and earned almost 80 pips both on demo and my real account. i used my standard lot size. the D point for the purple gartley closed under the 88.6% XA fib on the hourly/half hour chart. occording to the Tmoneybags rules we must close out a trade when that happens. also there is a daily msrt running just below the purple gartley, it is not shown on this image however [i have it on other charts] but beleive me it is there. it was responsible for the 215 pip bounce due to a D point on the 1st june 2015 being hit. normally if a fib point is breached on the hourly/half hour TmoneyBags will short to the next XA fib point. but seeing this daily trendline below made me cancel my short. by the end of the day price had touched the trendline and was now slightly above it. the gartley was a half hour or hourly pattern [due to size] so i was a little confused if the fact price had bounced of the daily trendline and closed above it meant i should treat the pattern as a daily pattern.
Then i examined the structure of the gartley, and realised it actually met the requirements for a bat by scott m carney quite well. price is allowed to close under the fib point with the way he trades. so i examined the price action within the potential reversal zone and to me it indicated price wanted to go up. this coupled with the TmoneyBags daily trendline made me decide to buy [with a stop loss below the X], the next day after alot of consolidation price took off and i took almost 80 pips. i did attempt another scalp with a much smaller lot size a bit later but that didn’t work out.
bigger pic: http://i.imgur.com/yDiaX37.png
currently on the hourly/half hour charts there is a D point shown where 2 gartleys [drawn] converge. if price can make it there and not voilate c or become too unsymetrical then we may get a reaction. in addition we have a dotted purple 8 hour trendline running just above it. it didn’t seem to work too well last time i used it, but i checked the trendline and imo it is valid so perhaps it will work this time. to safeguard against it failing i will be only going for 30 pips, and i will only take the trade if it hits at a suitable time [time of day seems to effect how likely a gartley is to work]. also not drawn on the diagram, 2 more gartleys converge with D points at that exact same area is we use X on the hourly 8sma that gartleys 88.6% lands right there.
from my anaysis attempt i believe over the long term the USD will weaken, but i also beleive it will fight against this viciously and the devaluation of the US dollar against the AUD won’t be quick or easy.
on a side note, a few other USD pairs shows gartleys [currently above price too] which adds weight to my prediction that the USD will weaken but wont do without a good fight.
thankyou for reading.
edit: typical …, just hours after i make my analysis price tanks down thereby completely negating the hourly analysis. the daily analysis i think i still valid [technically], but with that tank down in price is looking more unlikely. the thing with these top down analysis are that if price changes like this then your whole market outlook can change…