Please forgive me, I am quite new to this trading. I’m looking for a little insight on a setup that I have noticed and would appreciate any input. I have noticed a downtrend on the daily in June of 2017. It is about to hit correction 1 with the RSI and STOCH signaling overbought. I will be waiting for the moving average to cross and confirm the signal. Is there anything I’m missing or am I reading this analysis wrong?
Thanks
I am not a technical analysis expert but actually a coder, trading with intuition. NZD and AUD are highly correlated against USD. I believe it is on a mid-term uptrend now.
So what would you consider a reversal on a trend? I have been using a correction of 50%. Do you think this is too much? Perhaps I should consider a correction more in the 20% range and anything larger a possible reversal?
I am trying to figure that out and put it in code. For now, I rely on support/resistance levels and price action. The beauty with those numbers, whether 50% or 20%, is they can explain the past perfectly. But predicting the future remains a huge challenge still.
Haitao I appreciate your input. Thank you.
I absolutely see where you are coming from with that setup, but personally I’d also want to see Price Action look as though it is rejecting that level. What you have currently is one strong candle. You can also use lower timeframe charts to give you that. You might find that the hourly chart, for instance, is suddenly giving you nicely cycling lower lows and lower highs, all of which can give you more confidence in taking a setup.
(I stress I haven’t checked the chart so don’t take my word for it! I’m talking about things I look out for to give me more confidence in a reversal, not telling you what I think will happen on this particular setup.)
Dude, whats up.
The Ever Salutary VIPER
Hello!! Good to see that you’re still around.
All we need is H.O.G. and a couple of the others and we can start the band up again.
The Ever Loving My VB4 VIPER
Ok sorry for the minor hijack
Thanks, I appreaciate the insight. Like I said I’m still learning and I’m concerned I look for things that fit my agenda vs looking for the signals that reflect price action… Then there is the fundamentals. Ughhh
For me, fundamentals boils down more to trying to stay out of the way of any major announcements or ructions rather than trying actively to trade it. I just pick quiet days. And in terms of interpreting PA, for me timeframe confluence is very powerful. I just try to build up a list of reasons to be in a trade, rather than just taking one unsupported setup.
