EURUSD H4 – Ascending triangle break-out

2015-10-31 13_17_50-EURUSD,H4

As I noticed earlier, EURUSD was moving in an ascending triangle. You see how price several times noticed the long-term resistance. Every time Analytical Trader detected disbalance between supply and demand when the price approached the resistance level (by showing weak signals: Minor Supply, Supply, Major Supply). Once there was up-thrust – a sharp up-move beyond upper limit with wide spread bar on high volume closing on the lows (Analytical Trader detected Major Supply – very weak signal). Weak holders opened long trades during this move, hoping that this was a genuine break-out. Very soon their stop-losses were triggered.

Let’s get a closer look at this chart.

2015-10-31 13_57_46-EURUSD,H4

Last time when the price approached the long-term resistance we had 2 weak signals (Supply and Minor Supply). This has led to a price reversal. Right before the lower line of triangle was broken we saw several high volume and wide spread down-bars. The break-out bar was also on high volume. Therefore Analytical Trader can help us to predict whether the price is going to cross support/resistance levels or change direction. We just have to follow its instructions and it will significantly increase our chances to profit in the market.

EURJPY H1 – Trade Analysis

2015-10-28 19_26_44-EURJPY,H1

In this trade I want to point out a mistake which is better to avoid if you do not want losses.

What was right in this long trade:

  1. Strong signal (Minor Demand) before trend changed.
  2. Dynamic trend turned from red to green – this is the right sign for a long trade.
  3. Entry was made in a low volume down bar. This is basically o’k, only one thing – price moved quite far away after the trend changed.

What was wrong in this trade:

  1. There was only one missing thing – background was still weak. You do not have to go against the background, because even if other components are right for a long setup, it is most likely that this will not be a winning trade. If background is weak it means that imbalance between supply and demand is in favor of supply.

NZDCAD H1 – Follow-up trade +138 Pips

2015-10-25 13_01_33-NZDCAD,H1

In previous NZDCAD analysis it was noticed that the price was moving in mark-up phase. It is possible to draw an up-trendline with several touches which represents support line for the price. The following trade was based on near-trendline setup.

  1. Background is strong.
  2. Strong signals (Major Demand, Minor Demand) near the trendline.
  3. Dynamic trend turned from red to green
  4. Entry in a down-bar near the dynamic trend
  5. Exit by reaching TP level

Total +138 Pips

CADCHF – Market Analysis

2015-10-24 11_56_05-CADCHF,Daily

In daily chart CADCHF is moving in a bearish trading channel. Background is weak. Lower and upper lines of trading channel are trendlines with several touches. Upper line is a resistance to higher prices and Lower line is a support. The area between the upper and lower trend lines is known as the trading range. In VSA terms, the (sideways) market is trading within its range, and will continue to do so until applied (selling or buying) effort makes it break out. VSA trader will analyze price action in the top and bottom quarters of the trading range, because important observations take place in these areas, as the price heads for the supply or support lines. The area above the supply (higher) trend line is known as overbought and the area below the support (lower) trend line is referred to as oversold.

2015-10-24 12_26_26-CADCHF,H1

In H1 timeframe the price has reached the upper line of trading channel. Near this area we see several weak signals (Supply and Minor Supply).

NZDUSD H1 – Trade analysis

2015-10-21 19_35_35-NZDUSD,H1

Today I would like to analyze I think the most common mistake amongst traders – opened trade at the top of the market, right before price reversal. The professional knows people react to the two fears – the fear of losses and the fear of missing out, and so trades with this in mind.

After substantial rises, the ‘herd’ will become annoyed at missing the up-move, and will rush in and buy. This includes traders who already have long positions, and want more. The problem is that usually smart money is selling at this moment. They do not have to wary that this selling will put the price down, because they have plenty buy orders coming into the market (from weak holders) which will support the prices (therefore volume is high). Without interest in higher prices from professionals, price will inevitably fall. This will usually happen after up-thrusts: a wide spread up during the bar, accompanied by high volume, to then close on the middle or on the low.

  1. At the time of entry background is strong – o’k
  2. Dynamic trend turned from red to green – o’k
  3. Weak signal at the top of the market without strong signals at this price level (In VSA it is an up-thrust) – Not o’k
  4. The trade is opened when the price moved too far after trend changed – not o’k

During upward trend it is better to wait a reaction to this trend and enter the market after strong signal which would suggest that the reaction is over and rally will be continued.

GBPUSD H1 – Dynamic trend +145Pips

2015-10-18 13_09_04-GBPUSD,H1

  1. At the time of entry the background turned to strong. It means that imbalance of supply and demand is now in favor of demand.
  2. Very strong signal (Major Demand) before the trend changed its direction.
  3. Dynamic trend turned from red to green.
  4. Entry – when the background turned to strong and the price didn’t move too far from the dynamic trend.
  5. Exit after weak signal (Supply) appeared in the chart.

Total: +145 Pips

In the chart we see that mid-term resistance (previous high) was crossed by wide spread up-bar on high volume.

Resistance – this is a level of previous high, many traders bought near the highs and were locked-in when the price suddenly fell. They are now holding out in the hope of reducing their losses. Locked-in traders want only one thing – to get out of the market at a similar price to the one they first started with. Professional traders that are still bullish know this. To encourage these old locked-in traders not to sell, professional traders will mark-up, or gap up the market, through these potential resistance areas as quickly as possible.

NZDCAD H1 – Different phases in the market

2015-10-17 14_25_35-NZDCAD,H1

All price movements in Forex can be divided in 4 phases:

  • Accumulation
  • Mark-up
  • Distribution
  • Mark-down

Accumulation means to buy as much of positions as possible, without significantly putting the price up against your own buying. This buying usually happens after a substantial bear move has taken place. To the professional traders, the lower prices now look attractive. Once the smart money has completed accumulation, there will be no resistance to higher prices – this is a start of bull market (mark-up). Once a bullish move starts, it will continue without resistance, as the supply has now been removed from the market.

A Bull Market occurs when there has been a substantial transfer of stock from Weak Holders to Strong Holders, generally, at a loss to Weak Holders.

Distribution phase is the same, only it happens after a substantial bull move and professionals are selling as much of positions as possible. Once the smart money has completed distribution, there will be no resistance to lower prices – this is a start of bear market (mark-down).

A Bear Market occurs when there has been a substantial transfer of stock from Strong Holders to Weak Holders, generally at a profit to the Strong Holders.

In NZDCAD we see clear indication of accumulation phase at the bottom of market and later mark-up phase. Now the price has come to the long-term resistance (previous high). Often this may be the point where the price changes its direction. Look for distribution phases on the top of the market.

CADCHF H1 – Trade Analysis

2015-10-14 19_47_58-CADCHF,H1

  1. At the time of entry background was neutral. In this case you should check above timeframe. If it is weak – o’k for a short entry. In case the background is strong – you should not open a short trade right now.
  2. Weak signal (Minor Supply) before the trade was opened – o’k.
  3. Dynamic trend is still green. You should open a short trade when you have the whole set for a bear trade and only after the dynamic trend turns from green to red.

This is not enough just to see a weak signal and at once enter the market, because you have to analyze not only individual bars but look at the whole picture. Analytical Trader will help you to do this. You just have to follow simple instructions and wait until you have all the necessary signals before you open a trade. It will significantly increase your chances to be sucessful in trading.

2015-10-12 21_32_19-EURAUD,H4

Right after last short trade in EURAUD there was one more chance to use weak signal near the resistance level (this level has shown itself many times). Weak signal appeared during up-thrust. Up-thrust is a wide spread up during the bar, accompanied by high volume, to then close on the low. Up-thrusts are usually seen after a rise in the market or when the market is trading sideways. It is a sign of weakness – you do not normally see up-thrusts in strong markets. Up-thrusts are all moneymaking maneuvers helping the market-makers to trade successfully, at your expense.

  1. Background is weak
  2. Weak signal (Supply) near the resistance level
  3. Dynamic trend turned from green to red
  4. Entry when the price still didn’t move too far
  5. Exit by reaching TP level

Total +388 Pips

EURUSD D1, H1 – Moving in ascending triangle

2015-10-10 10_18_56-EURUSD,Daily

In previous EURUSD analysis I noticed how the price is moving in an ascending triangle. The same pattern you can see in the above chart. Now Analytical Trader has detected bullish setup: Background is strong, dynamic trend turned to green. Only one component is missing – strong signal behind.

I want to note how accurately it showed SL (stop-loss), TP (take profit) and BE (break-even) levels.

SL level is below up-trendline – it is a safe place, because it will require effort to cross this trendline and it will not be easy to trigger SL in this level.

BE is right on a long term resistance – you will not get losses in case of false break-out.

TP is on the level of previous support and very high volume. There is a big chance that in this area the price may change its direction.

2015-10-10 11_04_09-EURUSD,H1

In H1 timeframe we see how the price crossed long term resistance (area of previous Major Supply) with wide spread up-bar on high volume. It tells us that this break-out is genuine. Before the break-out the price was moving in an ascending triangle – look how lows grow up.