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 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