Hi everybody, hope your all well and having plenty of success within the markets. We thought as it’s the end of the week this would be a good subject to cover for anybody that trades using charts. Analysis paralysis – I think this comes to all of us at some point in time so maybe new traders can take something away from this. What do we mean by it? What we mean by this is over complicated charts. No matter how you trade be it indicators, trend lines, pivot points and so on. Over time and we all do it, we just keep adding more and more and more until it comes to a point where we can no longer view our charts without being totally pickled. Of course there’s absolutely nothing wrong with building your picture and you can never do enough research but sometimes the old saying holds true “less is more”. Every now and then maybe try and completely refresh your charts, by all means write down on a piece of paper your key levels or areas that are critical and then remove everything and start again. Take a look at a blank chart and I guarantee you will feel fresh, no clutter, no complications and no indicators just price moving against a white background. Absorb it for a while and see how you feel, start adding back in your analysis with a clear mind and maybe you’ll start to see that the things you had in place before where actually nothing but distractions causing false elusions and possibly effecting your trading. We hope this helps. Myfxhub
I always prefer fresh chart & take a decent break in every 2 hours (maximum).
Yup…keeping it simple is what its all about…my recent trade on the EURO AUD is a perfect example
FALSE CONSOLIDATION BREAKOUT REVERSAL ON EURO AUD
ENTRY SETUP ON THE 4H CHART
STOP LOSS ON THE 1 HOUR USED
TRADE RESULT
BASED ON THEORY OF FALSE CONSOLIDATION BREAKOUT REVERSALS
SUMMARY OF RESULT
No need to complicate things.
Duane
DRFXTRADING
How did you know that was a false consolidation breakout. By the time it breaks, if it’s true then you’ve missed the move because you’re waiting for a fake out. What is this bruh?
Hey man
Well I only knew it was a False Breakout after it gave the Double Bottoms and closed with that Bull Candle above Support.
When it initially broke with the Bear Candle several weeks ago, I assumed it was gonna continue Bearish…
Even though that initial Bear Candle did not lead to the breakout, it was still below Support so it could have been temporarily pulling back to test the Support before resuming the breakout.
However, when it began to take a long while to continue Bearish…I began to consider the Bullish Reversal as an increasing possibility…
…and had even made an initial forecast of an ABC Signal to start the reversal, which is another way in which these reversals can start…(from my Manual)…
The reason is that the longer the market takes to continue a breakout that has started…the greater the likelihood of a reversal. So it was no surprise that the Double Bottoms were formed to start the move…
…which was then confirmed when it closed with that Bull Candle above Support…
So there can be times when you can spot and predict early out when a False Breakout is likely …(weak breakout candle etc.). But other times it is not that clear especially when the initial Break Candle was strong as it was here. So sometimes the market gradually gives you signs that it will eventually reverse.
Key is having a feel of the market regarding what is likely to take place and knowing the Candles that are likely to lead to either outcome.
Duane
DRFXTRADING