255 PIPS ON OFFER FROM NZD CAD THIS WEEK - forex mutant trading system

255 PIPS ON OFFER FROM NZD CAD THIS WEEK ~ forex mutant trading system

A Large Range Setup appears to be forming on the Daily Chart of the NZD CAD that could offer us up to 255 Pips this week. The Support Boundary has already been formed at the 0,8335 area and once we see continued gains for the CAD, this will take us back to Support and complete the Resistance Boundary and the Range.

The overall setup can be seen in the graph below. The pattern of movements that have taken place in the last few months appears to indicate the formation of this large Consolidation in the days ahead.

POSSIBLE RANGE SETUP - DAILY CHART

If the pair continues to decline in the next few days, the Resistance Boundary would be formed at 0,8855 to complement the Support area at 0,8335.

RESISTANCE & SUPPORT BOUNDARIES - DAILY CHART

With a distance of 255 Pips from the current market price to the Support area, Swing Traders could realize a large trading gain once the pair gets going again. This would follow the current sideways movement now taking place on the Daily & 4 Hour Charts.

EXPECTED TRADING GAINS - DAILY CHART

PENNANT SETUP - 4 HOUR CHART

When this downtrend finally resumes, we will actually be continuing the breakout from this Pennant Setup. The Support was initially broken with a Bearish Candle and has been followed by a pull back and U-Turn as the market "tests" the broken Support. Once this is done and we start to see additional bear candles, short positions can be opened as long as our Entry and Stop Loss Placements are correctly done according to the Trade Sheet for Consolidation Breakouts from the Trading Manual...

It is fairly easy for us to spot Consolidation Setups and trade them after they have been formed across all time frames. However, the challenge has always been to spot the signs that they are being formed so that we can quickly adjust our strategies from a Trend Trading one to a Consolidation Trading strategy. 


So how do we trade this?


There are several technical factors in the currency market that tell us when these setups are being formed. Many of them relate to how long a trend has been in place before it begins to move sideways or whether we have recently broken a major Trend Line. These and many other factors that lead to these setups can be found in Section 4 Part 2 of the Manual...

As soon as you spot these factors at work on your charts, you can begin drawing the expected lines of Support and Resistance. Once the distance between these boundaries is far enough to allow for trades of between 100 and 200 Pips - comfortably - strong gains can be had as long as the trade meets the requirements set out in Part 3 of the Manual...

The key is to now wait on the appropriate signal on the Daily Chart to start taking advantage of the move to Support and the breakout from the 4 Hour Chart Pennant.

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ANOTHER FALSE BREAKOUT ON THE EURO USD - m1 forex trading system

ANOTHER FALSE BREAKOUT ON THE EURO USD ~ m1 forex trading system

Many traders will now be wondering why the 2 strong Bullish Breakout attempts on this pair have been met by sharp Bearish reversals in favour of the USD? The Bull Candle Signals given on the Daily Chart appeared to be strong enough to justify entry and provide sharp EURO gains, yet on each occasion, the Bears took control aggressively to pull us back inside of the Pennant Setup. So are there explanations for these reversals that are all so common across the Forex Market or should we put them down to just being random movements?

The Pennant Setup on the Daily Chart was formed by waves of Uptrends and Downtrends since June of this year. Within the last few weeks, we saw the first attempt to break out of this attempt with a strong Bull Candle at Resistance. However, this was followed up by sharp Bearish Candles that took the pair back inside of the Consolidation.

DAILY CHART- FALSE BREAKOUT SIGNALS

After only managing to reach half-way inside of the Pennant, we saw another attempt to head higher and breakout once more. This was given with a smaller candle signal but a very strong one nonetheless that usually leads to successful breakouts. Yet, once more, the Bulls were taken out by sharp Bearish Candles that have taken us back below the Resistance boundary. Based on this, it is very possible that we see a break to the Support boundary at 1.0815.

DAILY CHART - EXPECTED BREAK TO SUPPORT

These scenarios are very common traps that lead to trading losses. Breaks of Consolidation barriers are usually strong indicators that a profitable move will take place, offering large gains in a very short time. So it is no exaggeration to say that these losses can be surprising and frustrating for traders -especially when the signals are strong.

Based on what I have observed in the market over the years, I have found that there are 3 main categories of Breakout Signals that appear at Consolidations and only 1 of these leads to profitable breakouts. I have also noted that these candles also have to break the Resistance/Support boundary by a large enough distance in order to justify entry.

TAKEN FROM THE TRADING MANUAL 

("Successful Currency Trading With the Daily & 4 Hour Time Frames"-
Available as part of the Swing Trading Course at www.drfxswingtrading.com)

The first Candle that attempted the break out is one of those that have a low probability of success and should be avoided. The 2nd Candle is actually one of those that are normally safe to trade but the distance by which it broke the Resistance was not enough. Ideally, more than half of the body of the Candle needs to close beyond the boundary.

DAILY CHART- TYPES OF BREAKOUT SIGNALS

In order to have a correct signal, therefore, the type of candle and the distance of the breakout need to be appropriate. Once you are able to identify these types of Candles and examine if they should be traded based on these and other criteria in the Trading Manual, you will be able to avoid these traps and focus on those that lead to profitable moves.

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