Howdy guys, a quick follow-up to the 4 hour "study chart" (1st Duck) post. Below is the 4 hour chart again that I said looked interesting.
Why was it looking "interesting", after all It was a given that price was currently trading below the sma and our 1st Duck would only have favoured shorts, well here's my thoughts ...
1 I wasn't interested in taking a short trade in the green zone highlighted in the chart below, for me I just reckoned any trade in this zone might be a bit 50/50 or "chancy". Support could have held price in and we might have seen price head back up to the sma (and back down again) a typical case of where Bulls and Bears have little appetite.
2 For me to be a more confident in the Bears hunger (and short trades) I reckoned Bears really needed to close a 4hr candle below support, below the 111.45 area. A 4 hour candle that pierced this area and pulled back up wasn't going to be good enough, I was looking for a close below, a "Bearish Bite".
3 My plan wasn't to take any trades until Bears proved themselves. Now that they have closed below 111.45 I'd reckon short trade set-ups in the coming sessions (where your 3 Ducks line-up) are well worth taking.
4 The Bears next meal (or target) could easily be in the 109.50 area, +160 pips from where we are currently trading at.
5 On the flip side, a 4 hour close above the 112.40 resistance area (highlighted below) makes me think that Bears have lost their appetite. If this does happen I'd reckon it was a fundamental announcement (or two) that pushed price higher and not the technicals.
Side note: Of course the 3 Ducks is a discretionary approach and your thoughts may differ to mine, but if I had only one bit of advice for newcomers it would be to study the hell outta the 4 hour chart, your First Duck. Become good at having a solid logical grasp of this time-frame, spend years studying it! #Study4HrChart
Sure, would have made you about +40 pips, for me I wasn't pulling the trigger until we got that "Bearish bite". Thanks for the comment!
I'd reckon it did at some stage but you're jumping 2 steps ahead of me Cheers for the comment.