Thank you for your explanation. My thought process was the the overall trend is down as you can see it mid August to about mid October. Then it bottomed out and retraced back. I was looking at the top of that retracement to go back down. However, it seems to me that you are looking at like the trend is up and that’s why it would be against the trend. I see your point and thanks for your time.
I was not talking about the trend because before I look to the trend I notice other things that make it a no trade as I explained in previous message. For a trade to be a quality setup it must have a few core factors such as:
Stick out away from price and obvious
Form at key areas
Not form in a ton of traffic
Not be sitting on support or resistance (like this is)
etc etc etc
Before looking to other things as to whether or not this would be a great trade, the first thing I see is there is no signal to start with. What you are referring to as an BEEB is an IB. Then we straight away see it is formed in a box as previously explained and then we notice that price is sitting on support.
If this was a BEEB we would then notice that the signal does not stick out and scream at us.
If price breaks lower we would look for the next support to come in around 1.2570 and then if it continues lower the recent lows much further lower. If price holds at this support the next resistance would come in around where we can see the false break pin bar fail to break through around 1.2670 area.
EXAMPLE CHART - This is an example of a BEEB sticking out from a high and being pbvious. Noticed not formed with price sitting on support and there is what we call space.
One more question though… I thought that engulfing bars are to be sitting at resistance or support as they are reversal signals. Am I missing something here?
The first thing I want to talk about is the TF. I personally never trade the monthly and it is only occasions when I trade the weekly. Why? Because do you really want to wait around for the next 3 -4 months to see if your signal is going to work out? Paying commissions along the way (depending on broker account). Yes price action is price action, but it is far easier to stay in trades for hours or days at a time than months at a time. Most people in theory are fine placing weekly/monthly trades but what then very often happens is a few days into a monthly trade they are playing with stops and targets etc I see all the time someone will enter a weekly trade and before even one candle has closed they will be messing around with it. As long as you are aware of this and that you are going to be waiting months for the trade to play out go ahead.
Okay now for the setup. This is a tiny Pin Bar and one of the smallest candles on the whole chart. It is with the trend but it is a bit of a nothing candle. For me the resistance was a bit higher and if price had have moved higher we would now be seeing not only price rejecting resistance but also a lot bigger and more convincing signal.
Good luck with it and be prepared to wait and not fiddle away your trade!
GBPAUD MONTHLY CHART
I think that too…but BRN make some point to take this PA …but this time i will pass because its not meet my criteria to make trade…is there any correlation between GBP/CHF and USD/CHF because in USD/CHF there also 2BR and not good too…
I don’t post much but I am a keen follower of this great thread.
