In this chart I have explained what is risk reward and what is potential fakeout and complete understanding of the chart and you don't need to wait daily for such setups as they are properly planned and you just need to understand the logic and then react.
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Hi traders,
I had few weeks off and again here to update the blog with the best of the services I can offer. Today, I am here to discuss with you the qualities of a traders which you or me all need to work and It could be really daunting task to change the habbits but once You are good at doing what professional traders do, You don't had to follow the instructions from anybody else.
There is no denying the fact that trading is rewarding and that is why lot of institutions organizations are putting lot of efforts daily to facilitate trading and take their part and they don't care what others win or lost and that is the best quality a trader can have. You should never look for what you put at stake or what others are doing and you should know what your strengths are and should always look to act when needed.
Risk Reward in Trading is the best thing a trader can work and if you are strong in getting high rewarding setups, and look for the low risk opportunities and have patience to watch out for such setups, then that it is the best thing we can do. A setup below really explains it all for a trader and such setups are rewarding when there is complete understanding of price action and you have such strong Risk Rewards and I always like 10 times or more reward and that setup certainly had the potential.
Its quite a while since we have seen rallies from dollar index and its counterpart Euro and reason being the dovish Fed and key data awaited and no hikes in recent months after the first hike in December last year, But I think its just a matter of time when Dollar future will find direction and when It rallies it would be the strongest in the recent weeks and months. I have a trading plan to trade dollar Index and Gold Futures and I will keep the blog updated from time to time or when the opportunity arrives and that will help you to find low risk high rewarding setups.
Chart
Price has been trading in range from 1300 to 1380 for quite a while and I am still expecting that support to hold the price for a move towards 1340-55 area from where we could see another rally downwards from the Gold and there are no global clues of improvement and signs of growing global economies and economies like China, Australia biggest importer of gold are struggling from growth and hence banks are looking for tightening and it really needs a lot when they start expanding their balance sheet or we can see this type of reaction till the U.S election but I am expecting the ranges might be over in a week or so when we enter the last quarter of the year and that for me is always the most volatile quarter of all the year's trading activity.
Trading has been quite choppy during last but as chart speaks to you and there was no institutional and Banks involvement was seen and hence we don't seen price move strongly in one direction. Up and down both sides price found support and found sellers at the top. I really found a chart of gbp/usd, which I found of my liking and I think it will be better off to share.
If you take a look at the chart you will find reason there was strong rejection of the particular area on the top marked with blue rectangle and when price bounced of the lows this area hold the price for three consecutive rallies and then finally we see a break of the area and then price retreat of these levels and It was quite evident that we will see some reaction when this area will be again test and hence price found resistance again.
Friday rally was very low risk and Now I expect price to find support between 1.3120 and 1.3040 area, and rally again to 1.3280 for a test and this time If it got rejected we will set pending sell limit orders around those levels for another rally towards 1.2950 area, but IF price could not found support then we won't bother to look at this potential fakeout.
Trading has been quite choppy and reason being the expectations and japan and Britain focus has now again been shift to Federation and next meeting will be a concern that september rate hike talks would be strong and we can see a hike next month when federation member met for the policy discussions.
Its always important for us to know the trending pairs and play a waiting game till the price itself talk about the next move. No laughing stroke, as I see chart talking about the next move and that is what a trader has to look out for. Recent price action in Aud/nzd tells me that parity is again on the cards specially when so many rejects and overall bearish trend is roaring and we see another rejection Friday and test of 1.0700 area will be rejected once again and we can see 1.0450 and 1.0270 are and that will be a much better trade entry with no risk at all.
Sell stop at 1.0700
stop around 1.0735
Target first 1.0580
Target second 1.0450
I really want to test If price has rejected with purpose and supply from 1.0700 has been tested twice and reason I am quite confident that Price has engulf the last flag which was protected while it was tested last time and this time price has strongly rejected from the supply again and this time engulfing the demand strongly and that is the reason any test of 1.0700 will be rejected and that is why I always trading pairs which are trending and have clear swings and have least risk involved.
Swing trading is not easy but logic behind Swing trading is quite simple and you don't need any help of Indicators and other technical tools to spot the involvement of strong money as they hardly watch any chart to move the price and they use charts only for one purpose and i.e stop hunting. That trade of Aud/nzd can really help you trade naked charts once I post the chart in my next post of trade diary for the week August 14th 2016.
It has been quite a busy week but at the end of the week as it happen mostly on last trading Friday of the month and last day of the week, currencies starts moving erotically and usd/cad was no different.
But what different has happen as it was on the cards and when you spot smart money around you can expect movement in every correlated or non-correlated assets class pair and as Canadian dollar is directly correlated with Crude, whose downside pressure was on the move suddenly we see profit taking and GDP numbers from US and Canadian Area was surprising factor in the overall context and hence strong movement was already witness on the chart.
As you all might wonder, what is imbalance and I have stated it so many times in my blog Articles that strong trend reversals out of nowhere and then minor bull bear fight to move the price is the "Imbalance", area on the chart and we all must eye such locations and canadian dollar recent up down movement was a great clue of something will give away at some point and today was the day.
IF you see the chart clearly I have mention two areas where strong set of orders are seen after price make a new high and fail to hold on those highs are first clue of collecting all the buy orders against the big sell orders and this week new multi month high was no different as price engulf that with pressure and after that you just have to find the approach to supply and QM area to short and where risk to reward should be atleast 5-6 times but pair has fallen more than 150 pips so that rewards was never expected.
