I was wondering how you determine when it is time to enter and when you decide to switch from long to short. I see the circles you drew, but how do you determine those when they occur and where do you get into the trade.
Somewhere you mention that you want to get thos big candles, but halfway those short term rallies I also notice big candles without circles, it seems that you skip those and get the next one, but this is not consistent in all your analysis.
Cheers for your friendly reply. Here is a more clear explanation of my strategy using a trade i posted about earlier in the thread.
I analyse the retracements with a set format.
Move down 1 timeframe. 2. Count 2 pushes down 3. Make a point of reference after 2nd push down with circle 4. Move down to a 3rd timeframe. 5. Look for periods of consolidation in the market double bottoms, higher lows/lower highs using circles to mark these areas after 2nd push down.
Finally check for big news events coming up that could push my trade in preferred direction.
Here is what my AUDCHF trade looks like after I have completed this check list and I have marked it on my chart.
Here is the 30 min timeframe. I started on the 4hr, counted pushes of the retracement on the 1hr and then
analysed for periods of consolidation and higher lows on the 30min. This is where the circles are used.
The arrows with the vertical line is where i entered the market. The rectangle on the horizontal line is where i exited the market.
The aim for every trade is to catch the big candle which is always the beginning of a crashing market.
I have been doing very well over the last year particularly using this methodology and am interested if anyone else uses this style of analysis.
I have been able to achieve great results in the last year by focusing on fundamentals which combines with price action analysis.
Knowledge of news events is not my area of expertise. So I am interested in helping others understand my price action analysis who are fundamentals traders so i can sustain if not improve upon my results.
I believe I am onto something big here and am keen to hear from people who are open minded to using a combination of price action and fundamentals.
Before entering a trade I assess a lot of factors.
For example, higher lows, periods of consolidation, strength of cross pairs, upcoming fundementals, potential risk reward ratio and other factors that are more advanced.
In this trade for example I would be cautious about entering as we have just had AUD weakness across the board. Nevertheless, even if you entered this right now its worth taking as your profit target would be at 1.14000. With a stop loss of about 150 pips. This would be a risk reward of 4/1.
I dont take many trades maybe about 10 a year atm. Which can be frustrating as i will often see myself
predict big market crashes but only to see them get away from me without entry.
In the long term however I know patience rewards me.