Price action and pattern trading

Saying that, I should have put that last post in 'Anyone need any help' LOL!

Here's just my thoughts from a daily perspective on USD/CAD - don't let this affect your trading in any way - you know what I mean. I "missed" yesterday's and today's downswing, there simply wasn't a pattern on that top reliable enough for me to take it (from daily perspective). Not to get ahead of myself too much here is the chart: Fibos indicate 1.38 to be the strongest support but that's just fibos. I suspect we might see a test of that support, and it if coincides with the trendlines on daily, it is (would be) a viable entry to take and ride all the way up to 1.44. In the meantime these grey trendlines represent pivot lines and one can look for candle patterns on lower time frames to enter a trade.

I am more bearish than anything with this pair. ​

oops, forgot the chart​

Now I short​

You need close below 116.00 to be barish.

Good diagram there (for me) with regards to the placement of fibo.
I am beginning to understand its uses so to speak.

Nothing special there, or in any way complicated. todays USD/CAD downswing bounced off 50% line of the last upswing...it is most common bounce - I have no idea whether it will hold or no, but when you draw trendlines, you get a clearer perspective. Btw trade only candle closes, never get "into" an unfinished candle, especially if it just started graphing...Candle close is the mother of all entries.

You are spot on there. I've tried to get in a trade when the candle isn't closed yet just to watch it retrace and turn a nice candle into a pin bar.​

That's why I like daily charts at the moment (no time cuz of work and university) - and there are very few entries statistically (based on my system) - but when it happens it is usually 1:7+ P/L ratio.
Don't ever let the live price action get the best of you. After candle closes, you are the king of your trade. If you see price spiking through what you thought to be a support/resistance, LET IT CLOSE - and then enter. Believe it or not, you're drastically increasing probabilities for a correct trade when you wait for the close. If it closed above support - it gives more probability that support to hold out and produce a bounce maybe...if it closes below it - short away. If you're in the middle of a graphing candle, you will either catch the bull by the horns or catch a falling knife. Which is 50-50, and screws your stop loss usage and not to mention profit target...

This might be an opening for me...need today's candle to stay "hammer"

SL at lowest low of the hammers, TP as in picture. Close above the black trendline indicates and validates the potential trade as a successful one. I'm not a fan of entering on a hammer, but two hammers in a row...even a conservative bugger like myself cant "resist" it. Let's watch today's close...

Forgot to edit, TP at 176.00

Possible head and shoulders​

Looking at that again, I'm wrong. It hasn't finished the second shoulder.​

Notice there was no new low on 4H chart - GBP/YPY.

Another good learning point here for me after reading these posts.
I have just used fibo for the first time (correctly) and conducting this as an experiment in my demo account.
I have done what Demo has done above...

Looked at the overall trend over the last couple of months.
The 2 candles at the bottom I have read about, these are like 'fake candles' judging by the size of the wicks?

Is this a Long or a Short though?

You have drawn fibos - assuming this was the finished downswing - it may not be like that. If this is not a bounce which will produce a reversal, then these fibos are more less useless. Alos try to look at the large picture here, especially the TP at 176.00 Why exactly did I chose that TP (IF this trade becomes profitable)?
Also you need to draw a trendline like I did on that daily chart - candle close above that trendline allows for TP of 176.00. Candle not closing above that trendline indicates a new trend to be formed with the That trendline as the upper range. But ofcourse, todays candle's close would be ideal if above last three candles' open/close. It would indicate an upswing to continue.

So, theres two points in my system:
1) 2 hammers, and the second hammer actually didn't test a new low, which bodes well for the bulls.
2) trendline + fibos for the confirmation of a possible uptrend and candle closes above those lines.

EDIT: Also, your SL is not placed correctly - it should be at the lowest value of the candle pattern you're trading upon. Why place it higher over there?

Ill watch it closely, especially when it closes. Your entry on demo looks good, but maybe a little premature. Today's candle's close above last 4 candles close would indicate a possible reversal of this significant downswing. I'll probably take the trade this evening.

Thanks Demo.

Yeah I will take another look at my chart.
Yeah I got giddy there and steamed in. Classic way to lose more money from the demo account.
Fool rushing in.

Here is the magnified setup, and why I'm taking it. I'm not in a hurry, it can close much higher, I will still take it. Every trade is a risk and you need to accept that - no need to rush in. It's better to risk based on your system than to rush into decisions which fundamentally change your system from trade to trade. This trade is a risk, and I'm taking that risk since I like the profit/loss ratio. There would be no sense in me taking the trade if potential profit target was 70 pips, and my SL size is 100 pips.

CORRECTION: SL at 163.999 (was painting too fast)

Thanks for this Demo. Its a real learning curve you know?
By the way, when I entered that trade GBP/JPY - I got lucky so far.
It's hitting 438??? Lucky, could have gone the other way.

Although this is only pretend money, not mine.