Price Action Exercise: What Happened Next?

If its a five minute chart I say anything can happen next,and would not take a trade. If its a daily chart I would go short and bet the farm and the wife.

The second last candle broke the resistance of the double peak from earlier periods. I'd be waiting for a that new low to confirm and then a break of that second last candle's high.

You could almost trade it as a ross hook, with a close stop set at that new higher low. Though I've seen prettier set-ups than that. :


BTW, Excellent idea Akuma. This is perfect for the forum!

EDIT: Ooopps. Make that , the "last" candle broke the double peaks. Was trying to remember the chart while replying!

Most interesting there about the TD sequential, silverB, plenty for users to study already. I think what I will do when posting the answer in a few hours, is summarise the different methods used by users to study the chart, a kind of index if you will for users to research on.

Well I'll guess I will give this a try looks fun.

From my limited experience I am going to guess this is from 1hr charts and I will estimate were the price range will end within in the next few bars (I'm not sure are we trying to guess long trend many bars or just the next bar action.?) I also tried not too read any other posts to hopefully deter myself from thinking along someone else's lines.

I am going with a long outlook to the area of the square within the next few bars. Why? Heck if I know : Well I am thinking that we are in a retracement period from a long upward movement. All the whipping up and down the last few dozen bars, (to me) may indicate a waiting for a news announcement that showed up as the last big upward bar. If it breaks upward past the last try that was a few bars earlier I would guess I would have a really good chance on making it to the target area and upward.

Of course if I'm wrong it will probably drop down the area were the sharp up trend started. (forgot to mark it on my chart).

Bill


http://img141.imageshack.us/img141/6...ques8wr.th.gif

Checkstar has drwan a very good trend line and I will just use it for the answer.

For me, I should go long 10-12 bars ago with stop 20PIPs below the trendline. However if you really want me to do the entry again, the big white bar penetrate the resistance line, I may enter the long trade with stop 1 PIP below the low of the white bar.

However, there is no way for me to decide the exit point yet.

Look forward to the answers....

So what happened next? ... well first, here again is the original question chart:

QUESTION

http://img82.imageshack.us/img82/670...uestion6ld.gif

Now, what we are all waiting for, the answer chart, note the yellow highlighted area which indicates the decision point, or the far right of the question chart above. I have tried to add some of the lines indicated in the answers, so how did you go?

ANSWER

http://img98.imageshack.us/img98/968...1answer1jb.gif

I have to say there was not too many answers that didn't make sense, well done to all, a new question chart to come in the next day or so, for now we can discuss this answer.

You cannot predict the market but you can somewhat predict the risk/reward of your trade. Trading with price action and S/R gives you the chance to get high reward-risk trades.

SilverB

..
Good job Akuma.. lucky i go long...just lucky me..

Looks like most people had the right feel for the price action (yay!). I am surprised with the strength of the upside move through the resistance considering earlier in the chart price tested the resistance line several times before penetration.

Would like to know more about these 'Wolfe Waves' though (never heard of them before).

There is wolfewave.com is the originators site.
There is http://www.chart.nu/wolfewave.htm is really good. He has a tool so you search daily stock charts for the pattern. Although It requires you to understand what a good pattern is.

Moneytec has a loooong thread on the topic.

Put a ZigZag on a 5 min or 30 min S&P Chart and start looking.

SilverB

That was really interesting and it was fascinating reading all the different and similar approaches to reading the move. I find myself keeping on checking the thread just to see the latest update...can't wait till chart two. Great idea Akuma99

Time for question 2 in the "What happened next" series. Yet another random chart, however this time I have also given a zoomed out version of the same chart to give a little more clues. Same as last time ... answer the question ... What happened next?

QUESTION 2: What happened next?

http://img89.imageshack.us/img89/746...uestion8ug.gif

The same timeframed, zoomed out:

http://img89.imageshack.us/img89/733...uestion8zl.gif

Best of luck, the answer in 24 hours.

I actually joined this forum just to participate in this thread. We have a sharp move down that met well established resistance turned support. So I would guess a move up (retrace) to resistance around the top of the chart then another move down. This is great, it's like doing a chess puzzle! You know, find mate in two or three!

This is what I see. Either one of the 2 thick blue trendlines will bounce price down.

I'm with soso_beton, but think it will be less dramatic. I think it's nearing the top of the channel and will simply make another move back to about 2/3rds the way to the bottom of the channel and back up again. At that time it might once again break up out of the channel. At that point it will create a new channel with a slightly more bullish posture.

Thanks Akuma for running this. This makes me think just about what a bare chart tells me and not putting too much stock on what news or indicators or which pair influence decisions. Well at least for me for being such a newbie so far in Forex.

For question 2.

Well it looks like there a channel going on from the zoomed out chart and on the downward shot it bounced off a resistance line. It then formed a nice pin bar and moved up too the top end of the channel with a (guessing) 50 percent retracement of last big move down.

Now my forcast would be it moves down to the bottom of the channel and possibly wave withing the channel for awhile and then move out later on. My ruff estimate is out the channel on a downward move. Just guessing here, have to wait and see what happens in the next several bars.

Bill

http://img525.imageshack.us/img525/5...que85cw.th.gif

http://img526.imageshack.us/img526/7...s8ug9tt.th.gif

Just eyeballing the chart and using the grid in the background,i would say that a FIB expansion set on the last swing high and swing low would give a projection down to 162% about in line with the lowest swing low as shown on the chart.
jl

It is in the slow upward channel with a bar of morning star. Therefore I would long with stop 1PIP below the low of that long bar (11th bar from right).

My guess using the FIbonacci Spiral

Momentum of long move down should have a second leg down to the channel drawn by others, confluence of nearest left side resistance with fibonacci level forms the resistance it must break through but am betting will bounce off since the last leg of the bull trend has increased slope signifying a possible exhaustion reversal.

Stop loss 20 pips above for a good risk reward trade, but probably only get in
if it breaks current support.