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.
This is a trade analysis where I give some tips about what you should avoid in your trading. This trade was opened right after strong signal (Demand) appeared on the chart. Strong signals show that buying has entered the market. But if you do not have other components of a valid VSA setup you need to step away and wait another chance. This demand may represent buying from weak holders which open long trades against current price movement.
- At the time of entry background was weak and it was wrong to think about long trades in this case.
- Entry was made after strong signal, but dynamic trend is still red. For a long trade dynamic trend has to turn from red to green.
Also in this chart you can see our new indicator – “Reversals”, which is designed to detect price reversals. As you can see “Reversals” also does not support the entry after the strong signal.
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
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
