In this trade I will show how to use in your trading joint work of two indicators (VSA and Reversals) in order to significantly improve your chances for success. Trading becomes much easier with these indicators. As you can see Reversals with high accuracy shows places where price changes its direction. It may be used alone and as a good addition to VSA indicator (in this case you have the best view of the market).
- At the time of entry background was weak;
- Weak (Minor Supply) and reversal signals before trend change. Reversal signal confirms the signal given by VSA;
- Dynamic trend turned from green to red, entry while price didn’t move too far;
- Exit after reversal signal. Right after this signal on the chart appeared several strong signals, high volume and the price started to rise.
Total: + 41 Pips
This is a follow-up trade of previous USDCHF analysis. In H4 timeframe price has broken long-term resistance and continued to rise. Background is strong. This is a good time to look for long trades.
- Background is strong
- Strong signals appeared on the chart (Demand, Minor Demand) before dynamic trend changed from red to green
- Entry after dynamic trend turned green
- Exit immediately after weak signal (Supply).
Total: + 61 Pips
Our newest indicator Reversals was just released today. This is an indicator that recognizes patterns in price and volume action to determine price reversals accurately. These should be used within a trading system, either as entry or exit points, or as a confirmation of a trend reversal. It looks for different patterns than VSA does, so both can be complemented. The indicator also brings an adjustable sensitivity, changed directly in the chart, which allows to very easily adjust the indicator to the market and to your own trading method.
Reversals in EURUSD H1 with sensitivity = 8 (FxPro feed):
Reversals + VSA in EURUSD M15, as the price is bouncing on a support. VSA shows the background is still weak, though there has been accumulation recently at this level, shown by the green and blue dots/squares (Demand signals) before. Reversals on the other hand pointed out the reversals that VSA failed to, such as the last bounce off the support, as well as the most recent tops, as is normal with a high sensitivity (9). The most likely and strongest reversals are usually when VSA and Reversals both agree. If you’re already using VSA, check the blog regularly, where we will do posts that show how to combine these 2 indicators.
Click here to try a free demo on Reversals, and check Reversals page for more information.
Best regards,
Analytical Trader team
If we look at big picture in USDSEK, we see that Swedish krona has been moving in Mark-up phase since March 2014. It was a very persistent bull market without any reaction to the uptrend. As the price was reaching resistance level of previous high, the nature of movement was changed and mark-up phase was replaced by distribution phase. Price formed a resistance at 8.8000 level. It is well known that people think in round numbers and place limit orders, stop losses in this point. Here is some tip: Avoid round numbers when placing your stops – market-makers will know where your stops are. Above and below any actively traded market are not hundreds, but thousands of stops. The professional traders will gun for these stops, especially during periods of thin trading activity, as this represents an excellent moneymaking tactic.
In daily chart it is well seen that the price is moving sideways limited by levels of support and resistance. The rally was stopped when supply has entered the market (several weak signals on the chart). Nature of bullish trend was changed in this point and price started to move in a trading range. Watch carefully when the price is coming close to the support or resistance. Weak or strong signals in Analytical Trader will help you to understand whether the price will break these levels or not.
There is no stable trend in EURCHF (M15) and the price is moving sideways. On the above chart we have upper and lower limit of trading range. It is not a good idea to open a long trade when the price is near upper limit and you do not have strong signals suggesting that the resistance will be broken. Because it is unlikely that the price will leave trading range if there is no imbalance between supply and demand.
- At the time of entry background was weak – this is not o’k for a long trade. If we watch the price movement in this chart we see that background often turns from weak to neutral and to strong. This is because price is moving in a trading range and there is no clear trend.
- Weak signal near resistance before trend changed – this is a mistake to open a long trade in this point. Because this is a clear indication of price reversal. Also there are no strong signals which would suggest that price will continue to rise.
- Dynamic trend turned from red to green – o’k
- Long trade has to be immediately closed after Supply signal
This is a follow-up trade of previous EURUSD analysis. Price with high volume bars has broken lower line of ascending triangle (this is a good sign of genuine break-out). Later we had a weak signal (supply) near this line and price continued to fall.
- At the time of entry background was weak
- Weak signal (Supply) before trend changed
- Dynamic trend turned from green to red
- Entry in a low spread bar while the price didn’t move too far.
- Exit immediately after strong signal (Demand).
Total: + 160 Pips
