If you have several indicators then you can fall victim to a number of issues. Indicators by and large are lagging, meaning they show what happened after-the-fact, a history of the move. Too many indicators also leads to analysis paralysis because you can have too much information and too much competing and contradictory information. Sometimes they are simply inappropriate for what you want to use, certain indicators work well on the daily/weekly but suck no the 4h/1h much less the lower tf. Finally, if you rely on indicators too much you donāt learn to read what the price action is actually doing and how it responds to key reaction points.
Mainly I look for key s/r areas and plot those on my chart, then using the confluence of the tried and true factors, make my trade decision.
I took GU today for ~70 pips and hereās my reasoning for taking the GU instead of the EU. I saw the GU bounce and hold last night at Asia opening and start to move up, the GU did the same thing except the GU bounced off a key s/r I had on my chart based on the daily moves. This gave me a long bias for the GU and the EU. I used the strike zone TF and plotted my lines. In the 8am hour the PA moved down to the 61.8 fib line and reacted, started moving up. This was my que to enter which I did above the 61.8 reaction. TP set at the 1.618 ext which was also the DPV on my chart. PA moved strongly right to my TP and less than 60minutes I was finished.
Now I didnāt leave any lots on because this is Friday and getting near London close so there was a possibility of reversal and profit taking. Of course it could be said that the move long was the profit taking from the fall this week. Who knows. But I was not at all surprised when the 161.8 and DPV was hit and PA immediately fell 40 pips.
Here is the 15m chart so you can see clearly the time area I was looking at specifically for entry.
If you look at your own charts there are a few more things going ā look at the hourly chart. We had the low created at Asian session. On my chart I have a strong s/r that forms a support the GU hasnāt broken since 7/22, but it retested it a few times and failed to break it. I donāt think a Friday has the necessary power nor time for follow through to break it.
During Asia the currency experienced buying pressure and moved up. If you draw the fib lines from this low to the Asia high you get a nice OTE + retest of that s/r + S1 support at London open + more Buying pressure. (also same scenario with EU at the same time). So far today the GU and EU have buying pressure and not many signs of selling pressure. Finally, on my charts I didnāt have any obvious s/r between 6240 and 6400 that could be a reaction point; GU has sorta ranged between these areas so there was plenty of room to go long and it appeared GU was observing the range bottom again.
So I drew the fibs you see from the London move and waited. PA reached to 61.8 like it did in London, retesting the anchor as you will and started moving up. I sloppily entered long here and the rest you know. EU simply didnāt setup this nicely this morning and entry to me was more of a guessing game.
I donāt know if my analysis overall is correct or not, but this is my logic for entering on what I saw on the charts.
As I write this I want to point out that Gu missed the range top I had by only 8 pips before falling back.
