Showing posts with label USDCHF. Show all posts
Showing posts with label USDCHF. Show all posts

Saturday, October 19, 2013

Accumulation Pattern And USDCHF

I like to study and save charts of repeating patterns I observed with the belief that over time I'll get better at spotting them and anticipating a move. Here is an accumulation pattern that I've noticed many times. Again I don't know what to call it. The pattern formation goes something like this:
  1. Huge spike down - Selling climax in VSA?
  2. Price subsequently tries to make 1 or 2 more stabs down but fails to make significant lower lows. This indicates a weakening in selling pressure and often shows up as bullish divergence. The stabs down might also stop hunt previous swing lows, allowing pro money to load up longs.
  3. Price then breaks out of the pattern
Here are some chart examples:





It would be good if this pattern takes place at a HTF demand zone. It is also similar to a falling wedge pattern.

And now... I think I'm seeing something similar on USDCHF H1. It is still a small distance over a significant demand zone (blue area) so I won't be surprised if it takes another stab down into the zone first.

USDCHF H1
And here is the anti climax -  I don't know how to trade this pattern! I guess some ideas might be to trade PA bars at the 2nd or 3rd stab down (aggressive), or trade the breakout (in which case I don't know where to put the stop). 

Just something which I thought might be interesting!

Friday, May 17, 2013

USDCHF Daily Pin Trade - Win

USDCHF M15 and Daily
I think this was a decent trade. Traders who chase overextended moves/breakouts into supply zones are often retailers, and retailers always lose. The plan was to ride on them being flushed out of their breakout long positions. I just wished I had managed the trade better, in hindsight I should have taken full profits at the major trouble area, especially when the lower time frames showed huge signs of reversal. I wanted to try out a trailing stop in case a miracle happens and the support breaks, but I guess that was too risky with such a strong move up.

And here is the thing, an experienced trader will be able to tell whether a support will hold or break, or where price is likely to go, or how to trail a position properly. Those are my weaknesses still and I'm trying hard to work on them. I've had the good fortune of getting to know a few RTM members, they've been very helpful and have taught me a lot. Every week the movements of the markets are becoming more logical and less random. In summary, price ALWAYS bounce off either a supply/demand zone or a S/R level.