Trading the news Failed Signal 30th October

EUR USD 15 Min:

Today was a major data release. It matters not the slightest what it was specifically, only that it was due to be a time of extreme liquidity and volatility and possible fake moves by the big boys so that they can then go and take everyone's money in order to make their own.

Yesterday price spiked down with news then channeled to a point exactly equal to the length of the original spike. Horizontal bold dotted line. It was a also a larger time frame channel line touch. Slanting bold dotted line.

The first green arrow is the first trade I posted today and called in the forum AHEAD of taking the trade.

The second green candle is the news trade. When the data was released price spiked down 30 pips. I thought it was going to be another spike and channel down. I switched to the 1 min ready to trade rebounds off the 10 and 20 MA , but price formed a small flag of inside 1 min candles then moved rapidly up. On the 15 min chart it produced this picture of the engulfing candle. A strict wave count from the first high of the day shows the news spike was a low 4 which failed and engulfed up in a high 4 long trade. It was also second test of the measured move of yesterdays news spike and the channel line and the weekly S1 Pivot (bold red horizontal line).

Entry was where price engulfed up becoming a High 4. Position size had to reduced due to relatively large stop loss but I made is smaller by picking the bottom of the 1 min flag as the SL. 

Measure the length of the 15 min candle up to the top of the body not including the wick and add that on and you get where price peaked at the end of the day. Yes you guessed: another spike and channel.

Price action rocks.

Thanks as always to Al Brooks. Although how I apply it to the news and failed signals is my own innovation.

Views: 192

Comment by Surjya on October 31, 2014 at 3:10am

Good trade Constantine as been able to catch the pips you want.

My views saw a double bottom, pin bar candles and divergence in RSI. Price should have gone up yesterday at least to 1.2670 but was resisted in the 1.2620 area, which was a 23.6% fibonnaci level. My trade had 15+ pips but price went down and hit my breakeven. Today if the 1.2620 level breaks, then I guess price will go up keeping in mind today's economic reports, if they turn out in favour of EU.

Comment by Constantine on October 31, 2014 at 7:08am
Thank you for your comment. RSI regular or hidden divergence is not consistently profitable. You will win just enough to make think you can be a success if only you can tighten up further but you will end up blowing your account. There are two types of technical trading. Statistics and price action. The institutions who move the market may be loosely defined by statistics but they can never be predicted. Price action follows them.


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