This weekly update will cover EUR/AUD – where the primary focus is on the DAILY anchor chart.
This week’s potential reversal has been identified by the new PAST Anchor Chart MT4 Indicator
EUR/AUD has been showing some strength in recent weeks, and has been in a strong uptrend on the daily chart. On Friday, however, the bulls attempted to push the market higher but failed to hold onto the gains. It could well be that buyers are beginning to wonder whether it might be a good time to take profit. If so, price may well begin to roll over to the downside. If this does occur, we could consider participating in the move, risking as little of our capital as possible.
As usual, the steps are as follows:
Step 1: Identify a preceding trend ✓
Step 2: Identify a potential reversal candle ✓
Once both of these steps are complete we can say that there is a realistic possibility that a new swing could be about to develop. The current anchor chart of EUR/AUD satisfies these steps. If a new swing does occur, we may have a position in the market right at the beginning of a large move.
If we are correct in this thesis, and the market does move to the downside, our job is to be aggressive and make as many pips as possible.
If we are incorrect, and the market continues to move to the upside, our job is to be conservative and lose as few pips as possible.
We know that if we apply these principles consistently in our trading, over time we will come out on top.
Step 3: Drop down to a lower timeframe chart. In this example we are using the 1 hour chart ✓
Step 4: Draw some obvious trendlines by connecting 2 or more lows together. An example trendline is drawn on the chart ✓
New trendlines can form during the course of the week’s price action.
We will look to initiate short positions on a break or retest of the trendline as shown. If the trendline does not break we will not trade.
The PAST Anchor Chart MT4 Indicator has also identified a similar potential reversal on the GBP/AUD daily timeframe which could be an alternative to EUR/AUD – see below.
For more information on entries, please see Chapters 9 & 10 of the Free PAST Strategy eBook
If you would like to see further updates on how we trade these signals during the coming week, please visit the PAST Strategy discussion forum at EarnForex . Thank you once again to all of the contributors on the forum, who are posting quality charts and set-ups on a regular basis. We are all learning from each other and it is turning into a valuable resource for traders who use the PAST principles to guide their trading. We learn better when we learn together!
Have a great trading week!
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DISCLAIMER & COPYRIGHT
This report is based on my analysis on my charting package. It may differ to yours as it can be affected by time, market movements, charting packages and broker prices. I accept no liability for loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on any information in this report or analysis.
