Support/ Resistance Nearby and VSA

This video is one more of the series of videos about VSA, and shows the general setup on how to trade with supports/resistances and VSA, with the integrated alerts in the software. It’s posted in Youtube, if you wish you can subscribe to our channel to get notified of new videos.

AUDUSD – Rally After Accumulation Pattern (Follow-up)

AUDUSD H1 Volume Forex Trading

AUDUSD H1 Volume Trading

Following the inverse head-and-shoulders with buying volumes on the bottoms (point 1), seen in M15 and mentioned in the previous post, AUDUSD reached more attractive prices for buying and resumed its rally. Upon reaching a resistance level (down trendline) at point 2, volumes showed supply swamped demand, and the market reversed. Reversals also confirmed the second one, at the highest rating sensitivity. It’s an indicator that can be used for confirming VSA signals, or to show additional likely reversal points, like the one on the bottom at point 1.

Prices then followed the down trendline, and reversed at point 3, where VSA marked a Demand signal and a thrust bar. After 2 more supply signals showing up, at point 4 the trend was again stopped. This is often the case that the market oscillates between VSA signals, and shows the importance of correctly following the volume in trading, even if relative volume as in Forex.

After the supply shown at 4, the reaction was a frail rally with low volumes, which showed no interest by large players in an up move. In the last hours, another thrust bar appeared (pink bar), which is a common occurrence where uninformed traders go long, and that liquidity is used to dump sell positions and thus bringing the market lower very rapidly during the same hour.

Looking at the big picture, AUDUSD H1 is the middle of a trading range and on a small sell-off, so it’s risky to take any position in the hourly just yet. Prices should reach Gold, a commodity that is tightly related to the Australian Dollar, has just reached a very important support located at $1209. There was a no-supply test bar at H4 which seems to have been unsuccessful, as there was no upward reaction, and so lower prices are to be expected, perhaps a shake-out of the area.

 

AUDUSD M15 – Head-and-Shoulders and Volumes

Head-and-shoulders and VSA Trading AUDUSD M15

AUDUSD on the 15 minutes timeframe, is showing significant buying at nearby prices, with an inverse head-and-shoulders price pattern. This price pattern is characterized by 3 bottoms, and unlike many other unreliable price patterns, this one has actually a sound logic behind it: the first bottom is met with buying, and so the down move is halted. On the 2nd bottom, the lowest of the three, the market is shaken-out by being taken to new low ground, setting off stop-losses and triggering shorts on break-out traders. The market then reverses on professional buying using the ‘discounted’ prices, and then it still goes down one more time for some more buying, or just for supply testing. Though, using the prices alone isn’t enough, the volumes give useful information which should also be incorporated. In this case, VSA showed demand on the 3 bottoms, until the very last bar where the pattern’s high was broken.

On the last high, AUDUSD showed a no-demand test (testing higher prices for demand orders), which was met by a sudden down move, confirming the lack of demand. For an up move to continue, I expect prices to come closer to the lower part of the trending channel first.

 

EURJPY’s Supply/Demand and Trend Reversal Zone

Daily
For the past months, Euro/Yen has seen buying between 121.00 – 124.50, shown by the multiple strong signals at this area, and the high volumes at the bottom. It’s a quite loose accumulation pattern, since the market made a lower low at mid April (point 2) than the first bottom at February/2016 (point 1), along with the very significant selling seen on the lower timeframes, on the last rally (point 3). There is also a down trendline nearby, and due to these reasons, I’d be more inclined to trade a break-out of it on a lower timeframe such as H4, where it’ll be easier to manage the trade for a faster exit.

 

EURJPY Daily Trading Range

4 Hours

In the 4-hours timeframe, in point 1 VSA marked the bar as Major Supply, and as Supply using multi-timeframe analysis (showing as a circle). In this lower timeframe the most recent buying can be more easily seen, starting in point 2, where the arrows are pointing. Those are either high volume bars (red painted bars), which after a strong fall and price congestion, show demand in a more ‘disguised’ way than the VSA signals, and 2 VSA Demand signals. In point 3 there is another Demand signal, which is also a churn.

It’ll be valuable to see if there is a break-out of the trendline for a long trade, and to be alert for supply signals in the zone of previous supply, painted as the red rectangle. At 24/May (Tuesday) German ZEW Economic Sentiment is being announced, which if positive, could provide a price boost towards 124.670.

EURJPY H4 - Demand

AUDUSD M15 After Distribution – Trade Analysis

In this trade a long was taken at the strong VSA signal, though there was distribution behind. This is seen by the multiple Major Supply signals, with the prices not advancing further. A bit after, there was an upthrust bar (pink bar), showing more supply, and a successful no-demand test (light pink bar).

In the entry point there was some buying, though it wasn’t enough to stop the trend. The buy-stop should also have been set above this bar’s high (https://www.analyticaltrader.com/trading-guide/vsa-trading-setups/trend-trading/supplydemand-background/), which comes as a price confirmation of strength.

AUDUSD Failed Vsa Signal

AUDJPY M15 – A Down Reversal on Weak Background +27 Pips

After breaking the down trendline mentioned in our latest analysis post, AUDJPY started a healthy uptrend. On the 80.500-80.600 level high volume without any price progress was seen, and on a news event it went down on a wide range, in the 15 minutes timeframe. On a reaction to this down move, while the background was weak, a down reversal appeared (on sensitivity 4, which has the best Rating on this pair/timeframe), where the short was taken. A Minor Supply Signal confirmed the weakness on this reaction. The stop-loss was set above the previous high, and the take-profit near the up trendline, for a +29 pips move.

AUDJPYM15 Reversal Downtrend

AT and NinjaTrader Announcement

We’re proud to announce our partnership with NinjaTrader, which means all of the trading tools we have will soon be available for NinjaTrader 7!

 

So, for those who don’t know, what is NinjaTrader exactly? It’s a multi-asset platform, a free one, where you can check the charts, and trade various types of assets, from stocks, to Forex and futures. For Forex and futures, the live data is free when registering by certain brokers/data providers, such as FXCM. For stocks, end-of-day data is free for the stocks of US major indices.

 

NinjaTrader also brings an easy automatic strategy builder, where you can construct a robot using indicators and trade management rules, and to backtest it, without having to do any coding. While offering these features, the platform still maintains its user-friendliness and intuitiveness.

 

We think this is a very broad and powerful trading platform, and definitely worth a try if any of the features interest you. From our part, once we have the tools available, we’ll be using it regularly, including in the blog posts. Due to the broader asset offer, we’ll also expand on the assets that we cover here in the blog, and the strategies used.

 

Pivots and Dynamic Trend

You can download, for free, our first indicators for NinjaTrader, Pivots and Dynamic Trend, through this page:

» Download Complementary Indicators

Dynamic Trend in NinjaTrader

Dynamic Trend in NinjaTrader

 

Soon we will release other tools for this platform, new educational content, and a brand new indicator is coming for Metatrader, so make sure to check regularly! And as always, if you have any questions, feel free to contact us.

 

VSA + Background New Video

We have just released a new video about the newest trading strategy VSA + Background. Soon we will be releasing more educational content, and we’ll be announcing other exciting news pretty soon, so make sure to check our website and blog regularly!

 

USDJPY and AUDJPY – Intraday Analysis

USDJPY

USDJPYM15 Breakout

On the last post I noted that USDJPY was on a trading range, and the closest zone to watch was between 106.200 – 106.300. Prices reached that zone on the Asian session, and did so on wide high volume bars, breaking-out 106.200 to the downside, which also made the background turn to weak. The price was still sustained for a few hours after demand, but a few hours before London’s open, the activity spiked up again and more selling showed up again as a wide-range down bar, closing on its lows. These lower prices didn’t held up for long though, and after one more demand signal from VSA, the prices broke a down trendline and kept the uptrend until heavy supply hit the market and turned it sideways, onto the trading range we are seeing at the present. USDJPY is also getting to the break-out point of 107.600 support, which is important because that is the last point where many sellers got in. I would like to see a small rally after this downtrend, or the background turning weak, to consider taking short positions. Any position will have to be taken at most at tomorrow’s London session and in a low timeframe, as NFP is on Friday.

 

USDJPYM15 Supply Distribution Trading Range

 

AUDJPY

This pair is near a support, at 79.527, and near a down trendline now at 80.100. Yesterday we have seen more demand above the formed support, though the rally after it failed spectacularly after there was no follow-up to the very high volume candle, with VSA showing a minor Supply signal 2 bars afterwards. The correction is showing low volumes, hinting at a temporary lack of supply, and the background is very strong. Reversals at sensitivity 7 have a good record on this pair and timeframe, even weeks back, and one near the support would be a possible long entry point. The safest would be to wait for the trendline break though, for confirmation. Meanwhile the prices are reaching the demand zone and it’s also important to be on the look-out for selling in the form of wide high volume down bars, like was seen on USDJPY yesterday on a similar occasion. Together with USDJPY, if the price/development confirms it, they could be two good pairs to trade against each other (one long and one short), since they are positively correlated by 50% due to the Yen.

 

AUDJPYM15 DemandArea and Trendline

USDJPY Intraday – Breakout Before Bank Holiday

After a wide upthrust bar, also marked as heavy supply, on last Wednesday, the Yen broke the support at 107.62 the day after. It broke with healthy volume, and the prices only stopped downtrending on a reverse upthrust, and later a churn, which are volume patterns that show demand.

USDJPY H4 Breakout

USDJPY H4 Breakout

On M15 the action can be seen more clearly, and the trading range in the last days is more evident on this lower timeframe. By today’s end of Tokyo session, at 5 am GMT, the market showed supply on very high volume, from the three timeframes – M15, M30 and H1. Right now the prices are trending lower, though on very thin volume due to Japan’s bank holiday on 3rd May. Thinly traded markets can be an opportunity for large players to make their movements however, since there is little to no resistance to any significant organized action.
It would be wise to be on the lookout for more demand/strength between 106.200 – 106.300. To the upside, the price 107.62 is the trigger for short positions, if the supply shown in H4 proves to be consistent. The fact that there are many announcements regarding unemployment on US will surely provide plenty of movements, and make the price reach these critical areas in USD/JPY.

USDJPY M15 Demand Zone

USDJPY M15 Demand Zone