Hi fellow traders,
I’ve recently started with forex price action and the problem I encounter is that I’m not certain which trend is most important. My strategy is based on trading WITH the trend and i trade on daily and 4h timeframes. I m looking for price action candles at strong Support/resistance areas in trend pullbacks.
For instance when the intermediate trend is down and the short term trend is up. Should I be looking for long or short positions? Also see my examples below.
Really hope someone with more experience could share their point of view.
Thanks in advance!
I guess it depends on your style of trading. I mostly swing trade, so here’s my take:
NZDUSD - Your chart looks just like mine on the daily. However, on the weekly you can see it’s headed up to a major resistance level. Whether or not it makes it there I’m not sure, but if the USD continues it’s strength through the week it won’t. I’m waiting for confirmation on this one.
GBPAUD - On the weekly it’s almost at the bottom of that channel and nearing a major support level, so be careful shorting this one.
AUDCAD - I’ve been watching this for a while now and actually just shorted it today. I probably should have waited for confirmation, but it’s been flirting with that resistance level the last couple of weeks and the overall trend is down.
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Thanks for your reply and your explanations. I see you zoom your charts way more out… So you don’t look at the shorter term trend when swing trading?
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Yes, I do. I usually trade from the daily but mark the major S/R levels on the month and weekly to get the whole picture. I will sometimes go down to the 4H to mark my channels, if there are any, so that I can get a better entry point.
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The trend to follow is the one that matches your plan. Don’t change your plan to suit the trend.
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Definitely right. But I’m trying to figure out which trend would be more important when swing trading. And if it is still considered as ‘trend following’ when you’re going for instance against the short trend but with the longer trend… If that makes sense haha…
The good thing about that is if you’re wrong it has a much better chance of coming back.
I always prefer to wait for the longer term trend to resume, no matter how long it takes.
@Thym-on
How are you going to exit? Where are you planning on placing a trailing stop - this will give you a better idea of the trend you should be following.
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