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Tuesday, April 16, 2024

Chart of the Week #1


This publish marks the beginning of a brand new weekly class right here on the Tradeciety.com web site. From this week on, I will likely be sharing the chart of the week each Friday right here on our weblog. With the chart of the week, we’re going to take a deep dive into chart analyses, and value motion buying and selling, utilizing a step-by-step method to understanding value charts. 

This week, we’re going to try the AUD/USD. I shared this chart research in my weekly e-newsletter beforehand. If you wish to be a part of my weekly buying and selling e-newsletter and obtain one e-mail each Thursday with model new buying and selling ideas and the perfect chart research, you’ll be able to subscribe without spending a dime right here: Tradeciety Publication

 

Let´s begin on the larger timeframe and we are able to discover quite a lot of nice insights concerning the value motion right here:

  • The Double Prime marks the excessive level of the vary. When the worth fails to clear a excessive, the sentiment turns barely bearish. However there may be extra…
  • Subsequent is the Liquidity Seize. A Liquidity Seize is a fakeout sample. This sample reveals the rejection of the bullish try and take out the highs. One other bearish sign.
  • Then there may be the Break of Construction which alerts that the worth is now in a position to break into recent lows. At this level, it’s time to go to the decrease timeframe. 

AUDUSD_2023-08-03_09-29-38

 

On the decrease timeframe, we are able to see the breakout pattern wave. Nevertheless, one factor is necessary to look at right here: Though there’s a breakout, the pre-breakout pattern wave is extraordinarily bearish. The merchants who resolve to only promote the breakout at this level are chasing the worth. That is usually thought-about unhealthy apply. The longer a pre-breakout pattern wave is happening, the upper the prospect of a pullback. So the perfect factor right here is to attend for the subsequent sign… 

AUDUSD_2023-08-03_09-30-31

 

Ready was actually the correct resolution. Though, on this instance, the breakout may have offered a small winner, this isn’t at all times the case and a pullback also can happen a lot sooner. Now, the worth has arrived again on the breakout stage and we are able to await assist to show into resistance. To get a good higher entry sign probably, we are able to go to a good decrease timeframe to look at the worth motion there.

AUDUSD_2023-08-03_09-31-06

 

The decrease timeframe reveals this wonderful Momentum Buildup sample. The worth has constructed a pure assist stage and is de facto sticking to the extent. This reveals that there’s a lot of promoting curiosity that’s protecting the worth that near the extent; the patrons can’t get the worth larger from there anymore. A breakout may sign the beginning of the subsequent pattern wave. That manner, the dealer wouldn’t chase the worth however enter comparatively early within the new pattern wave; a significantly better entry situation in comparison with the primary one above.

AUDUSD_2023-08-03_09-32-40

 

And voila. The ultimate final result. In fact, this is not going to work out on a regular basis however nothing in buying and selling works 100%. Nevertheless, this top-down method could be a nice basis for a buying and selling technique. I might suggest attempting it on Demo or in a Backtest (no actual cash!) and evaluating the effectiveness for your self.

AUDUSD_2023-08-03_09-33-05

 

That´s it for this week´s chart of the week. You’ll learn once more from me subsequent week with some new buying and selling ideas and my favourite charts.

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