Mastering Swing Trading using Market Framework

Hello Everyone,

I am pleased to share some knowledge in trading from what I discovered a few years ago this is my first thread here on Forex Factory, I must say thank you to those fine folks for allowing me the privilege here to do just that.

THE CHART:
Japanese candlesticks,horizontal,vertical lines and possibly zig zag indicator,this will help you identify HH,LH,LH,LL (little or no indicators required)


THE SYSTEM:

1. Identify the main trend on a higher timeframe.This would be the Daily/H4 if you need entries on H1,just an example.Looking for a clear trend is essential allowing you to draw trendlines connection points 1,2 & 3. When you establish the above on HTF it's much easier viewing LTF price action.What you don't want on HTF is congestions and too many spikes not allowing a clear run for your trend line (TL).

2. When trend lines are drawn,LTF entries can be taken.What you have to look at when price makes contact at 1/2/3 points are candles breaching the TL and closing within the main trend.Let's say the trend is down,you sell or go short ,you have a TL at a slope from high to low and points 1/2 are connected,price will retrace to another point calling this #3,candle need to breach that area and close inside your structure to become a valid sell. Of course the opposite will apply for buys/longs,screenshots and detailed descriptions will be posted.

3. Buy/Sell on LTF only if HTF framework has been established.There is more to this than meets the eye and that's where the magic unfolds!
More to come soon.....

4. Trade Management illustrated in screenshot EURUSD attached.You'll aim for 1:1 risk using SL at previous swing low or ATR if you're fine using that calculation.
At 1:1 target close 50% of your position/s and leave to run until 3:1

THE SHARP INCREASE IN DELTA CASES WORLDWIDE IS NEGATIVELY AFFECTING THE GLOBAL ECONOMIC RECOVERY
US jobless claims fell to a pre-pandemic low of 348,000 (previously 377,000), indicating a recovery in the labor market. On the one hand, this is very good for the economy and the dollar index. On the other hand, the labor market recovery can influence the Federal Reserve, so it will begin to reduce the QE program, triggering massive sales in the financial markets. The US stock market ended Thursday's trading without a single dynamic. Index Dow Jones decreased by 0.19%, S&P 500 added 0.13% and NASDAQ added 0.11%. The FOMC minutes indicate that the Federal Reserve may begin cutting the QE program at any time, but analysts tend to think it will happen between September 22, 2021, and January 1, 2022. Investors are likely to be very cautious all this time, so the growth potential of indexes will be limited.
European stock indices closed in the red zone yesterday. The British FTSE 100 decreased by 1.5% (a 3 month low), German DAX decreased by 1.25%, French CAC 40 lost 2.4%. The European Central Bank and the Bank of England are not going to change their monetary policy at the moment. Given Europe's conservatism, the EU is likely to be the last on the list to tighten monetary policy.
The gold situation remains unchanged. Now it is important to know when the Fed will start cutting the QE program. Reducing the Fed's debt purchases will raise US government bond yields, which will lead to a sharp drop in gold. But as long as the monetary policy remains unchanged, gold and silver prices will rise.
Oil prices fell to a 3-month minimum. The sharp increase in Delta cases around the world is worsening the outlook for global fuel demand.
The People's Bank of China (PBOC) kept the loan prime rate (LPR) unchanged. China aims to build modern socialism in the country. At a meeting on financial and economic issues, Chinese President Xi Jinping said that excessive income should be combated and called on citizens and companies with high incomes to give back more to society for the prosperity of all. Amid the news, Hong Kong's index fell by 2.28% to a low this year, while China's blue chips decreased by 2.4%. In July, Japan's consumer price index fell by 0.3% on a year-on-year basis. It didn’t meet the forecasts of economists, who had expected a 0.5% decline. The core consumer price index, which excludes changes in food and fuel prices, fell by 0.2% on a year-on-year basis, beating economists' expectations. The coronavirus continues to constrain economic activity in most cities across the country. Seven more prefectures are under a state of emergency. Analysts believe the quarantine will hit the already weak household incomes. Japan's Nikkei index decreased by 0.87% to a seven-month low. Quarantine restrictions in Sydney were extended for another month.

still, some sectors will benefit on the next covid cycle.

if current governments won't be replaced then we can expect covid-cycle based economies additional 2-3 years and there will be huge development/investments into various hi-tech solutions to "get out" ...

indexes could crash no more than 30%. then govs will stabilize. because pension funds rely on stocks. print additional paper money and stocks price get bounced back on the track

we all see mega inflation for construction materials, metals, electronics, electricity, gas etc


thisis May.. now I see in construction materials stores prices are up by 200% on some stuff...

Totally agree on that...gov't replaced lol...smart thinking next covid cycle is coming for sure.They will stabilize anything once it keeps them afloat to remain in the system.Greed,Corruption,Power......CONTROL! Here on my island everything had been sky-rocked,except the price of KFC,buy more cook less at home now ,all restaurants are open for business 100% of the country,DELTA is camouflaged among us.....

Money can be printed,yes,certainly......we all know it comes from nothing,thanks for such a brilliant thought...appreciate it.

At those crucial areas when price makes LH trying for higher hopefully failing..... look for simple 123 patterns on M30 and lower if you watching H1 and H4........this will confirm with retest we're heading down.... risk can also be greatly reduced

this is when you have a money printer in control..

I know this space will be a learning center.

Well done

USDJPY
H1 structure - drop to M5 and adapt those zones,you'll come up with almost zero drawdown buying and selling,emulate this on present and future analysis

Hey fxrabbi.......thank you for your presence,feel free to post as well....you're welcome,much appreciated

Nice stuff boss. Subscribed. Show me the money.

Thank you Alan....ok will do

Gold didn't continue down,but did something important according to the channel and blue horizontal lines that created the retest zones for bearish engulfing candles.Price action changed and this always happened,we now seeing a break and retest of the channel,price goes higher.

GBPUSD - Bullish engulfing and retest,drill to LTF for entry or buy from there,breakout from channel,at #3 everyone was caught selling?

If you did on M5 at the 3rd point of contact this should be at least 1:1 risk before price going up....lets go lower and see.

Yes, caught me selling -30 pips

Yes,H4/Daily shows a down trend but a correction happening as we speak,but who knows this retracement might just be a reversal. Zone where bearish and bullish patterns are formed being tested/broken.This is why most of my charts will have those patterns and they play an important role in trading...I don't care looking at indicators,price and patterns give the story.

XAUUSD - Again we see the price rising higher breaking out from a channel from the past 4 days now,very nice price action,what do we see at the breakout?
Bullish engulfing and retest.

Managed to catch that one boss. +22

Very good,happy you did Alan,even a faction of its move is cool...Gold now 181 pips today as I type and ADR 150%.Textbook style channel breakout and retest.