1
Support and Resistance, Swing / Long term trading
I like what I see on UJ.
Monthly Bearish Engulf at a high...thats good. Unfortunately,
1. I dont take entry based on the Monthly, but it gives me perspective & a bias for the month ahead.
2. I still need more before buying the Yen as previously mentioned multiple times in this thread.
I either get more technical confirmations (break of TL, change of order flow on Monthly & Weekly which is very far from where we are right now).
OR I get some fundamental shifts (from negative monetary policy to neutral or positive).
Either way, im in no hurry and I will wait patiently before shorting all cross pair against the yen.
Monthly Bearish Engulf at a high...thats good. Unfortunately,
1. I dont take entry based on the Monthly, but it gives me perspective & a bias for the month ahead.
2. I still need more before buying the Yen as previously mentioned multiple times in this thread.
I either get more technical confirmations (break of TL, change of order flow on Monthly & Weekly which is very far from where we are right now).
OR I get some fundamental shifts (from negative monetary policy to neutral or positive).
Either way, im in no hurry and I will wait patiently before shorting all cross pair against the yen.
Why do you think the EURCHF fell so far this week? Is it testing the Sept '22 low, I wonder. I am long on it and much in the red right now. ...
From a technical perspective, EURCHF has been in a very long and well maintained downtrend.
We never broke structure on the highest timeframe suggesting a real trend reversal. So I will stay short as long as there is no change of order flow on the M-W charts. Based on myfxbook, we know most retail traders will always go AGAINST the trend. Its a popular belief that retail traders mostly follow a trend trading strategy, but its not true. Look up ANY major pair and ANY major trend (EURUSD or GBPUSD during the Ukraine-Russia war, GBPJPY or any JPY pair since all G7 countries have positive interest rates and they are the only one of the G7 with negative ones, creating a major uptrend in all pairs against the Yen) so look up any of those pair, look back at past history of the "Sentiment" indicator on that website. If you dont want to look it up, here is my previous thread explaining some of it:
I am going to kick this off by saying Im a strong believer in Monthly charts. I believe market turns at major Monthly swing point/structure. I know most retail traders use the Daily as their "highest time frame". I dont. I believe the markets will never turn and do a MAJOR reversal at a Daily swing point. Of course, im sure you can find the exception. But in vast majority, market turns, big market turns, happen at monthly swings. If you base your counter trend trades on the Daily time frame, I suggest you stop right now. Look at this EU chart. From October 2022 to January 2023. {image} Look at all these structures being taken out on the WEEKLY chart. Now, imagine if you were trading the Daily or H4 chart trying to do what? Like 90% of the retail community, trying to sell and catch the top. Dont believe me? Lets take a look at myfxbook sentiment from October 2022 to January 2023. {image} Big surprise? Not really. Retail traders have been massively short during all that uptrend. Still think im cherry picking like I did above with GJ? Look at Gu. Look at ANY other chart and compare to myfxbook sentiment. Usually and curiously, the real market turns will happen in conjunction with a change/surprise in fundamentals at Monthly zone and this is where I personally go against the trend and with the "crowd" trying to sell an uptrend or buy a downtrend. At some point, retail and sentiment will be right and market will turn. I trade major reversals on a Monthly chart and usually I just place a pending order and when/if I move to BE and get taken out, I will look to re-enter using one of the 3 types of price action confirmation. I firstly use pending order because of what I think traders will do at those massive reversal points (see the CHFJPY example above): long term holders will exit completely or partially their position, longer time frame traders will look to hedge the other way, creating a reaction. That reaction will be seen by shorter-term traders and then you know the rest of the story. I think there is a place and time to bet against fundamentals and technicals for a big turn. Those type of trades, for me, happen at Monthly swings. No matter what are the fundamentals, I will usually trade against the trend at those times.
So if you truly want to avoid trading like retail traders, trade with the trend, not against.
From a fundamental perspective, CHF is probably the safest currency. Stable politics, stable economy, not involved in any war. It will take me a LOT to go against such a strong currency with strong fundamentals.
Of course, if you look at smaller timeframes and no fundamentals, its hard to see whats really going on. Just some hypothesis and thats only my opinion friend
I hope that helps
I do not think that double bottom will hold on EURCHF.
We already touched it back in the month of october, had a reaction up (as seen in the purple circle), but it didnt last and now we are back to the origin.
I may be wrong. We are over extended to the downside, so a retracement up may occur, but Im betting on the break to the downside
We already touched it back in the month of october, had a reaction up (as seen in the purple circle), but it didnt last and now we are back to the origin.
I may be wrong. We are over extended to the downside, so a retracement up may occur, but Im betting on the break to the downside
So, after looking a little bit more in deth at UJ, I will look to short that pair for 2 reasons.
1. Monthly Bearish engulfing.
When looking historically at that pair with Monthly Bearish Engulfing, in 19 instances when they happened, only 7 of them failed. And by fail, some of them had the following month bearish, but no sustained move. So you could say only 6 failed.
So from a technical standpoint, with the 20th Monthly Bearish Engulfing, I will take my chances. There is an edge right there. Even more so that now we are at a Top.
2. There are some talks of the BOJ shifting their economic view and ending their negative monetary policy in 2024.
1. Monthly Bearish engulfing.
When looking historically at that pair with Monthly Bearish Engulfing, in 19 instances when they happened, only 7 of them failed. And by fail, some of them had the following month bearish, but no sustained move. So you could say only 6 failed.
So from a technical standpoint, with the 20th Monthly Bearish Engulfing, I will take my chances. There is an edge right there. Even more so that now we are at a Top.
2. There are some talks of the BOJ shifting their economic view and ending their negative monetary policy in 2024.
I will be looking for longs on AUDUSD.
Bullish move at Monthly support, change of order flow on the weekly chart now retracing back to structure.
I will look for H4 or Daily PB (pinbar) or Engulf at the BR (break&retest)
I dont like how it looks on the Monthly chart. No real change of orderflow noticeable as you can see below. This is why it is not a pending order and why it will be a confirmation one with hands on, meaning if I ever enter this pair, I will move quickly to BE and take partials.
Bullish move at Monthly support, change of order flow on the weekly chart now retracing back to structure.
I will look for H4 or Daily PB (pinbar) or Engulf at the BR (break&retest)
I dont like how it looks on the Monthly chart. No real change of orderflow noticeable as you can see below. This is why it is not a pending order and why it will be a confirmation one with hands on, meaning if I ever enter this pair, I will move quickly to BE and take partials.
I will be looking for longs on AUDUSD. Bullish move at Monthly support, change of order flow on the weekly chart now retracing back to structure. I will look for H4 or Daily PB (pinbar) or Engulf at the BR (break&retest) {image} I dont like how it looks on the Monthly chart. No real change of orderflow noticeable as you can see below. This is why it is not a pending order and why it will be a confirmation one with hands on, meaning if I ever enter this pair, I will move quickly to BE and take partials. {image}
We got a nice reaction on AUDUSD. As stated, I did not take a pending order here but if the Daily closes as an engulfing, I will either enter at market or use fib retracements to enter. I will let you guys know tonight IF it closes as an engulf.
Pending buy order AUDUSD at 50% of the body of the Bullish Engulfing Candle
Entry: 0.65755
SL: 150 pips (I want to cover the Daily swing low BEFORE the KL. If I would have entered with a pending order at the KL (if Monthly and Weekly would have been aligned), I would have covered that low with my SL. If you are more a risk taker than I am, you could place a SL below the low at 0.65215.
TP: not set, as usual, I will use partials & trailing stop when I see want I need to see.
Entry: 0.65755
SL: 150 pips (I want to cover the Daily swing low BEFORE the KL. If I would have entered with a pending order at the KL (if Monthly and Weekly would have been aligned), I would have covered that low with my SL. If you are more a risk taker than I am, you could place a SL below the low at 0.65215.
TP: not set, as usual, I will use partials & trailing stop when I see want I need to see.
{quote} We are in. I entered on a retrace for a better entry. It was "riskier", sure, because The price could have flew away quickly, but I would have needed 150 pips SL on AU, which is a lot. I preffered to take my chances and place a pending, betting on a retracement
Some potential trades for the week ahead (or maybe the week after).
NZDCAD, AUDCAD, NZDUSD. All somewhat correlated and the set up is looking the same as you will see below. I dont really trade with alignement (NZDCAD & AUDCAD touching support at the same time for example) because I've seen this failed more often than not. For example, I had a good set up on NZDCAD but I was waiting for AUDCAD to align with the potential trade I had on NZDCAD. AUDCAD never went to the support and NZDCAD just reacted and bounced right up, resulting in a missed trade for me.
So while im not actively looking for alignment, if you do get it, it just increases the odd of success of your trade (I think, but have no proof whatsoever and whoever tells you otherwise without stats to back up that claim is just lying or has a bias). For me, I see this like a confluence.
So here is a similar set up on all 3 pairs:
NZDCAD
AUDCAD
NZDUSD
I dont use fib a lot and tbh, I dont even know why I still use them besides my 618 retracement entry. It adds a confluence to my zone of Support & resistance, but even if I didnt have that fib, I would still take the trade so... Does it reassure me in my set up? Is it to "feel like" it increases the odds of my trade? Maybe for all of these reasons. I dont take a trade because there is a fib. But I do add a fib on the swing legs up & down and if they match, so be it.
I believe in order cluster around those areas of fibs, specially when 2 lines up like the NZDUSD. Both from the retail side of things as well as the institutions and algos. For more details, this thread is a golden gem:
https://www.forexfactory.com/thread/...utional-trader
NZDCAD, AUDCAD, NZDUSD. All somewhat correlated and the set up is looking the same as you will see below. I dont really trade with alignement (NZDCAD & AUDCAD touching support at the same time for example) because I've seen this failed more often than not. For example, I had a good set up on NZDCAD but I was waiting for AUDCAD to align with the potential trade I had on NZDCAD. AUDCAD never went to the support and NZDCAD just reacted and bounced right up, resulting in a missed trade for me.
So while im not actively looking for alignment, if you do get it, it just increases the odd of success of your trade (I think, but have no proof whatsoever and whoever tells you otherwise without stats to back up that claim is just lying or has a bias). For me, I see this like a confluence.
So here is a similar set up on all 3 pairs:
NZDCAD
AUDCAD
NZDUSD
I dont use fib a lot and tbh, I dont even know why I still use them besides my 618 retracement entry. It adds a confluence to my zone of Support & resistance, but even if I didnt have that fib, I would still take the trade so... Does it reassure me in my set up? Is it to "feel like" it increases the odds of my trade? Maybe for all of these reasons. I dont take a trade because there is a fib. But I do add a fib on the swing legs up & down and if they match, so be it.
I believe in order cluster around those areas of fibs, specially when 2 lines up like the NZDUSD. Both from the retail side of things as well as the institutions and algos. For more details, this thread is a golden gem:
https://www.forexfactory.com/thread/...utional-trader