I wanted to open this thread in the forum but don't have sufficient coupons regrettably. Well, why I want to start this thread is quite simple. Nowadays people are using all type of indiors and make things complied for them self. I don't really feel that that is a good way to trade. Using Stochastics and RSI etc may fail big time. How many times do we see embeded stochastics? Just how many time do we find RSI overbought and prices still continnue to go up? How many times do we see MACD cross and following day the trade fails miserably? I don't think I need to answer this to many of us. I have tried many things, even news trading and it simply didn't worked. What did work was simple trendlines and chart patterns recognition. Indiors can sill be utilized tough but I would not trade . The one thing I put in is Fiboncacci. So let's keep it simple and clean. Don't need 1000 trendlines in 1 chart. Just a couple and pattern recognition.
So the initial up is the EUR/USD.
EUR/USD is hoping to form an inverted head and shoulder to the daily. If you don't understand what an HS or Inverted HS is I'd counsel you to go trough the basics of patterns recognition. More of pattern recognition are available here. Http://thepatternsite.com/dbw.html
So we need to break the neckline initially before we can continnue north.
But. Even if we break how much will people go? Looking we also find a broadening descending wedge pattern on the daily. This pattern tends to be favorable. So 1 day the Euro will rally against the USD. But looking at the bearflag what's forming I don't think we'll break out to the upside down on the first effort.
This is my trading plan.
I shall go short on the EUR/USD around the 1.2770 area. Will place a halt 150 pips greater. And target towards the 1.1300 area. I think the RR is really good with this on.If we start to trade sideways I shall shut my place and will wait for the break out to the upside.
This is my chart.