Video Analysis of the Daily and 4 Hour Charts

TRADE 4 - EURO JPY CONSOLIDATION BREAKOUT STRATEGY 1

On November 20, a strong signal was given on the Daily Chart to start a sharp breakout from the Pennant Setup.

This was expected to provide sharp gains in favour of the Japanese Yen heading into December as the Euro continued to lose ground across the Forex.

The initial break of Support was followed by a brief period of sideways movement that formed a small Pennant Setup. This was a way of ‘testing’ the boundary before continuing the breakout with the bearish signal.



A target of 172 Pips was set at the Breakout Equivalent of this smaller Pennant but due to the lack of market activity during this holiday period, the trade was only up by 47 Pips - smaller than expected but a win nevertheless.


In situations such as this, re-entry is possible once liquidity returns to the market and the signal is strong enough to justify trading it to the original target.

TRADE 5 - CHF JPY - SLOW BREAKOUT - STRATEGY 2

This new trading strategy takes advantage of breakouts that would have otherwise have been ignored given the small nature of the candles that often lead to unexpected reversals. However, it has been now been realized that these can be very profitable once we are able to distinguish between those that lead to these reversals and those that successfully hit their targets.

On November 21, this pair provided such an opportunity with a signal to indicate the resumption of the breakout that started back in October. The expected breakout was in keeping with the new Downtrend that was formed as the pair continued to break farther below the major Uptrend Line in place since 2012.



This was another example of the market pulling back to ‘test’ the broken boundary before U-Turning to resume the breakout. It is one of the three common ways in which the market can start breaks from these setups (3).


The target of 172 Pips was set to coincide with the Breakout Equivalent of this Pennant but at the end of the holding period, the market had come very close to the Limit Order before pulling back to close the last day at 101 Pips.


The candles that continued the breakout were small as expected but they still moved by over 100 Pips to confirm that these would be the ones that offered profitability. Once again, this was a trade that had to be closed early in order to comply with the very important holding period rule that is essential for trading success. This helps to control our ego and our greed that can get in the way of profitability.

Another important feature of this trade was that this overall setup and breakout was forecast several weeks ago in September using the tools of Candlestick Patterns in the Manual. As you will see from the video below, the formation of this Pennant and the breakout were expected based on several key Technical Factors that control the movements on the Forex Market.

With this Methodology, you can not only predict major market patterns ahead of other traders, but also confidently trade them when the right setup is eventually provided.


Duane
DRFXSWINGTRADING

The recent trades on the CHF JPY and the EURO JPY highilght the accuracy of the Holding Period rules in specifying when to exit trades in anticipation of market reversals. Some of these reversals can be small, 30, 40, 70 Pips…

Other reversals can be…



Higher Time Frames make you understand the larger picture of what is happening on the LTFs.

Take the recent spike in the CHF JPY on Thursday.

It may have seemed like a simple trend change with breaks of Downtrend Lines taking place on the 30 Minute Chart…


…but examining the Daily Chart, you can see a Large Consolidation being formed …


…which is based on certain patterns of candles that generally lead to these Consolidations…


This means that the rally was always gonna to take place to form Support and most persons who saw this would have stopped selling in anticipation of this rally…


Duane
DRFXSWINGTRADING

This successful trade took advantage of the sharp False Breakout Reversal from the Pennant Consolidation on the Daily Chart that started on December 3, 2015. As with all of these types of setups, the initial breakout attempt was quickly taken out by a strong, opposing signal that led to a breakout at the other end of the Consolidation. Given that this setup was in sync with the theory of False Breakouts, the trade provided a strong gain of 140 Pips.

The graph below shows one of the examples of False Breakouts that take place across the Forex.


As you can see from the Daily Chart of the GBP CAD below, the setup was almost exactly the same as the one above.


(FXCM Used for Chart Signals based on New York Close of Daily Candle)

Trade was made, led to 140 Pips, using 4H Chart…


(Dukascopy, where I have my Live Account, used for Trade Execution)

Exit took place before reversal now starting


Maiin Factors

  • False Breakouts
  • Daily Candle Signals
  • Entry using 4 H Chart

Duane
DRFXSWINGTRADING

GBP USD - TRADE UPDATE DEC. 22, 2015

Overall looking Bearish given the Consolidation breakouts on the Daily Chart


However, 4H Signal given is too weak to trade now…


This means we gonna have to wait for another 4H or Daily Signal that is stronger to justify entry

Duane
DRFXSWINGTRADING

[B]GBP USD TRADING LOSS[/B]

Recent trade on the GBP USD resulted in an unexpected loss. The Setups and Signals on the Daily and 4 Hour Charts appeared to be strong enough to justify the trade. Nevertheless, the market pulled back to take out the trade.

In the video, you will see this discussed along with the possible explanations and forecasts for this pair.

[B]
Duane
DRFXSWINGTRADING[/B]

Thread continued here

http://forums.babypips.com/show-me-the-money-swing-trading-/77786-aggressive-swing-trading.html#post739592

Hey all, back with you.

Latest trade gave us a 149 Pip gain on the EURO USD as it headed to Support of Pennant on Daily Chart.

This was the overall setup as seen in this chart and the Video Analysis


Entry took place using the 4 Hour Chart, with the target set to just above the Support of the Daily Pennant.


After a few days, target was hit.



Overall, Return from these Strategies is now 25%


This trade continues to show how we can better results by focusing on the larger time frames. These offer larger movements and more reliable signals to take advantage of these trends.

Stop Losses should be placed at areas that will protect trades against temporary pullbacks before our targets are hit. Support and Resistance and Trend Lines - once strong enough - great places for Stop Losses.

MAIN TECHNICAL HIGHLIGHTS OF TRADE

[B]

  • Trading Within Consolidations

  • Using Strong Daily Candle Signals

  • Using Strong Stop Loss Areas on the 4 Hour Chart

  • Waiting Patiently Until Target is Hit

  • Strong Gains Possible with Swing Trading[/B]

Regards

Duane
DRFXSWINGTRADING

I think that Yen will likely depreciate in value over the coming week because of the policies coming from the BoJ who are actively trying to drive the Yen down here’s an article I read last week about various currency pairs and their outlooks.

What about the growing risk-off environment we’re seeing across global markets? How would a ballooning of that strategy impact your opinion?

Its funny…spent 5 Years studying Economics, 2 Years at my Central Bank, competed in Fundamental News Trading at Dukascopy…for moves of 30, 50 Pips, yes, but for moves of 100 - 200 Pips, news doesnt matter.

If a news announcement is gonna have an impact, just have to wait until its reflected in the Daily /4 H Chart Signal. No need to actually predict the news. Just wait for the signal and trade it. None of my trading needs to look at news items. Everything is reflected in the Candlestick Signals.

WHY DAILY CHART ANALYSIS IS CRUCIAL TO DAY TRADING & SCALPING SUCCESS

Now, even though I preach the benefits of Swing over all other types of strategies, I always say that knowledge of how the Daily Chart is crucial to avoid unexpected reversals on the smaller time frames. I remember a time when I Day Traded that I only had 1 successful trade out of 32 trades in a single month. Even though I had a good strategy, it was not enough without using the patterns of the Daily as the main guide.

Take this NZD CHF back in September 27, 2016. In the charts and video below, I warned about why it was too risky to start trading long despite the Bull Candle given at Support of the Daily Chart Pennant Setup.


This would have tempted many to start trading Long in hopes of a major bullish move over several days. But instead, the market reversed sharply to take out the Bull Candle and any long positions that were open.


Now this is where it gets tricky. Even though it was a strong bull candle by itself, given the size of the Consolidation, it was weak. What you´ll notice is that certain types of signals are more appropriate for certain size of Consolidation, but not for others. So you have to know which combination of Signals and Consolidations give you the green light to start trading and which are risky to trade.

Just like Indicators, there are times when Candlestick Signals will also give False Signals that lead to losses.

So this is one of many examples I´ve seen over the years that have created traps for traders. Another one that could be on the way is for the EURO AUD.

Daily Chart now giving a Bearish Signal indicating a move back inside Range…


…but the bullish move on the 30 Minute could easily tempt us to start going long in expectation of a Trend Line Break…


Even if it rallies, this is likely to be temporary and risky to trade. The better option will be to wait on a strong bearish signal to ride the wave down for larger trading gains.

Bottom Line… we gotta analyze the Daily Charts and their Candlestick Patterns in order to stay ahead of this little game…no way around it. Larger Time Frames control the rest of the market and we gotta include them as part of our trading. It will tell us the when, where and how to trade, how many pips we can get, and whether its really worth the risk.

[B]
Duane

DRFXSWINGTRADING[/B]

Hey Traders, how goes it?

Following up on that analysis above, the EURO AUD provided a good trading gain of 88 Pips.

Below is the Chart and Video analysis the anticipated this bearish move


…here is the 4H Chart Trade Entry


and the Trade Result on the 4H Chart…


…and on the Daily Chart…


Strong gain to take advantage of False Breakout Reversals.

[B]
Duane

DRFXSWINGTRADING[/B]

Hey all,

Another example of how the Larger Time Frames allow us to predict the major moves of the market…



…and here´s the video that predicted it.

Larger Time Frames and Swing Trading…best combination to make money long-term.

[B]

Duane[/B]

Recent trade on the EURO GBP shows how Candlestick Patterns on their own are powerful enough to predict and profit from the market.

[B]VIDEO ANALYSIS[/B]

Duane

Recent trade om Kiwi Dollar shows how Candlesticks are all we need.

Duane

i find your videos great. i believe that “simplicity is best” and I also agree with you that the “news” are already “priced in” and they usually show in the “candlestick charts/signals”. unless of course something completely out of left field happens that “none” knew of or expected then the analytics go out the window but this is extremely rare. i have noticed many news that came out (which I wasn’t aware of happening like the uk polls a few days back) that happened yet the market had already shown a candle signals (which I had traded) in such direction the move was of 200 pips (i was short gbp/jpy) boosted by the news but the signal was there about 18 or so hrs prior!

anyway, although I like your posts, what makes someone more readable is their results. why not post every week your actual pips results summary (like I have done in my own posts) starting with the last 100 trades, pips profits, win rate, etc in this way anyone can decide wether to follow you or not…

just food for thought
no money details are required just real live results…

I only trade 3 crosses (with some exceptions), I have a one page trading method that works for me, but I wouldn’t mind demo trading (this is what I usually do with new ideas) your forecasts but first I would love to know your track record

cheers
fxpirana

Thanks fxpirana

Yeah, Candlesticks keep things simple and they already tell what will happen before the news as you said. I´m a former Central Bank Economist and I can tell you that most of these news items are unreliable because of their short-term nature. Once you know which Candles are the most accurate/reliable, using these will be good enough.

Live Account record coming up in a few days.

I saw your thread…good trade results. What has been the overall performance with these 100 trades?

Regards

Duane

This describes the trade made at the end of last week as the pair continues to form the Consolidation Setup on the Daily and 4 Hour Charts.

[video]https://youtu.be/6GQbNcV-kpY[/video]

Once you know the Candlestick Patterns that predict these Setups, they can be traded for profit.

Duane