Hey guys, today I was looking at the chart GBPUSD and I saw this. I’ve tried to analyze it and this is what I came up with. I would very much appreciate your help, what have I missed, what have I dont wrong. Thanks!!
I saw that It just consolidating at the hourly resistance, then It tried to break the resistance up, I came back, started consolidating again, then I saw the break of structure and it started creating lower highs, moving average crossover, then the moving average became resistance and it respected it so I go in with a stop loss above the last high and take profit down at the next level.
Did I do something wrong? Did I miss something out?
Thank you for your time guys!
There is nothing wrong and you did not miss anything out.
The lower timeframe is usually just mere “market noise” especially within the first hour of the London Session Open.
Instead of taking unnecessary risks which could result in unintended losses, I suggest going to a higher timeframe such as the H1 (multiple of 4) to determine what the market has been doing over the past 200 hours.
Questions to Ask Yourself
- Is the market trending, in a range, or consolidating?
- If I am long, where will I be entering the trade?
- If I am short, where will I be entering the trade?
- Where will I place my Stop Loss?
- Where will I place my Profit Target?
Thank you for your response. So I should avoid looking for lower highs in 15 mins and rather go to H1 to get more secure trades. Right?
So now when on H1 it looks like this
That means it’s breaking structure and not creating a lower high, so it’s very likely to hit my stop loss. Right?
Use the Higher Timeframe (H1) to plot Support & Resistance Zones (including Trend Lines) while going to the Lower Timeframe (M15) to spot for High Probability Setup (e.g. Price on the lower timeframe bouncing off resistance which was previously drawn on the higher timeframe).
You will then enter and manage your trade positions on the Lower Timeframe (M15).
Market appears to be in the midst of a bullish rally towards the upside.
You may consider using the Fibonacci Retracement tool to measure where the price could bounce off next and then shift your SL accordingly. It could bounce off the 50%, 61.8%, or even the 1.25000 round figure.
However, if the markets proved you wrong and kept rallying higher beyond the 1.25000 round figure, just accept the loss, learn from the experience, and look for the next high probability setup.
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Thank you very much for your response!
Have a great day!
Such a great analysis. It is helpful. Keep up the great work.
The lower timeframe does not hold much meaning. Consider using EWA and Fibonacci retracement tool for precise measurements.
