USDCAD M15 Trade analysis:
In this chart you can see a very popular entrance among traders – buy stop at the level of previous high. I will analyze this trade from the view of Analytical Trader.
- At the time of entry background was strong – it is a correct part for a long setup.
- There were several weak signals (two Minor Supply) before trend changed and no strong signals. It shows that selling has entered the market. It is very risky to go long in this case.
- Reversal signal also confirms that market can turn down in this place.
- Dynamic trend turned from green to red – it is wrong for a long setup.
- Trade has to be immediately closed after two Supply or Supply, Major Supply signals, because there is a big chance that prices will turn direction after this signal.
“Reversal” is our new indicator which accurately detects price reversals. It can be used alone and together with VSA indicator. In last case you will have the greatest advantage in your trading and the best view of the market.
One more trade in USDJPY opened after previous analysis. As I discribed, the market is moving sideways and 123.74 – is a key level which represents resistance to higher prices. Again price changed direction near this resistance. I waited another signals and shorted the market.
- Background turned to weak.
- Weak signal (Minor Supply) before trend changed. Reversal indicator also confirms market reversal in this place.
- Entry after dynamic trend turned from red to green (stop-loss is placed above long-term resistance)
- Exit by reaching TP level
Total: + 49 Pips
As it was noticed in CADCHF analysis, price was moving in a trading channel. In the above chart we see how the price has broken the upper limit of this channel. Break-out was made by high volume up-bar. Later price touched the trendline (very often once resistance is broken it becomes support) and continued to rise. There are several wide spread up-bars with high volume near the break-out. Background turned to strong and it was clear that pattern of moving in trading channel was changed. It was time to look for long trades.
- Background was strong
- Several strong signals (Demand and Minor Demand) before trend changed. Reversal also confirms these signals.
- Entry after dynamic trend turned from red to green
- Exit by reaching TP level.
Total: + 125 Pips
Right after my exit in the chart appeared weak signal and signal from Reversal indicator, price turned down.
Reversal indicator is looking for different patterns compare with VSA indicator and quite accurately detects price reversals in the chart. The best view of market can be achieved by using both indicators.
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
- At the time of entry background turned to strong. It means that imbalance between supply and demand is now in favor of demand.
- We have a long-term support in the chart. This support was established by previous low. Several strong signals (Major and Minor Demand) appeared as the price was approaching the support. One more strong signal here: Shake-out – wide spread down bar accompanied by high volume. But next bars are bullish and we see price reversal. It means that it was a stopping volume which contained more buying than selling. Otherwise the price would have continued to move downwards.
- Dynamic trend turned from red to green.
- Entry – when the background turned to strong in a low volume down bar.
- Exit after reaching TP level.
Total: +105 Pips
