March 17 – March 22 2019
How did these play out?
CADCHF – The four hour chart was interesting and the quick up and rejection down with basing at support is the shorting zone for 100 pips potential on this trade
EURUSD – The thrust up was a concern however the pause on the 14th of March was a pullback which turned this into a complex correction. This is a decent example of a failure test of highs as momentum rockets through resistance and gets kicked back. The four hour chart shows this very well and volitility compression with the inside candle setups up the short due to short bias. 134 downside.
GBPCAD – Price in range
GBPJPY – As written, the initial thoughts were long depending on how this range resolved. We can see a poke above highs and rejection on March 13 which didn’t preclude longs. The four hour chart shows momentum to the downside breaking the support zone, a lazy pullback (this is our sign for shorts). Strong momentum in the pullback would negate any trade as it would have been back in the range. Price ranges, small test of highs on the 19th sets up trend line break entry for 328 pips. Yes, you could have shorted when price failed the highs (think 2B reversal) which gave an earlier entry.
USDCAD – Long bias all the way on this pair. The multiple tests and fails of lows was bullish. Buy stopping break of trendline after higher low put in and break of 3349 level gives 78 potential
We are still not seeing strong sustained moves in currencies. The setups look good, the follow through is not exciting although this week was not too bad. 512 pips were up for grabs and GJ traders would have had many more.
Keep in mind that these charts are posted on the weekend. Price evolves and like we saw in the CHFJPY, the evolution of price can change the outlook. Most times, the outlook changes from a counter trend play to a with trend play depending on how price digests any counter trend momentum move.
The secret is, although not a secret, is to apply everything we cover in these updates. There is never anything presented that has not been seen before on these pages. Changes in outlook follow the same explanation as has been seen virtually every time.
As an example, the CHFJPY had 2 days of consolidation at the end of a momentum move down. Lower time frame showed an uptrend pattern of higher lows. Longs were then the only consideration.
Set your rules. Trade your rules.
I am not trading yet, just learning. This your info does not only say were to look, it also says what to look for. Very very important. It minimises the search effort greatly. THANKS.
Thanks for the comment! Location is important when swing trading but without something that tells you the setups is ready, kind of useless. So far, this week is pretty decent
I get the email for the set-ups, but when I click the link to the site I do not see the set-ups?? What am I doing wrong here ?
I am not sure. Click here and scroll: https://forextradingstrategies4u.com/forex-trading-signals/
Hi SD- I hope I find you well. Your comment on the performance of last week’s pair AUDCHF refers. I know that basing upwards or downwards is bullish or bearish respectively. I was of the opinion that even if there is basing upwards and we get a failure test the price bias becomes bearish because of that failure test. What you mean is that whenever there is basing downwards or upwards and we have a failure test, in most cases price bias does not change and also depending on context?
The key is the series of higher lows going into resistance. Combine that with the basing, it is bullish. The perfect failure test is a drive up (or down) in momentum and then the test. A stair stepping pattern is a lower time frame trending pattern. Make sense? Check this chart so you can see what I mean by a price drive: https://forextradingstrategies4u.com/wp-content/uploads/2019/09/CADJPY.jpg
Hi SD, I am a beginner and just starting learn ebou forex, I want to ask about your GBP/JPY signal last week, how you determine the triangle break upside?
And what are you think about when the price break downside the triangle?
I didn’t know where it would break but the odds leaned upside due to the proximity of support. If it would have broken downside, I would not take the trade.
Great job here
Hello Sd – Can you please give some clarity on when do we enter trades using the four hour time frame and when to use the Day time frame?
Thank you in advance
I will make a post about it but if you’ve been following along for a while, you’d have seen that explained virtually every week during the previous week update. In short, it’s using the same price patterns we find on the setup chart – the daily chart – on the lower time frame chart. Example would be a pullback on the daily chart ending with some type of consolidation on the lower time frame. Playing a breakout of the four hour range into the higher time frame pullback……
Hi SD, I have another question while I wait for your post. If I miss a trade on the four hour, lets say it is a failure test or a break out for example, can I still make an entry when the day candle closes?
Great question. You can however if the candle at the close is more than the average true range of the recent past, you may have a larger risk profile. You will also have an extended market which can lead to a sudden snap back.
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You are welcome
How do you define not stable? Have you quantified how you make the decision? The truth is and always will be – if a setup occurs according to the plan, I take the trade.
Thanks for the question. Simple correction is one corrective leg and complex is at least 2. These are time frame dependent. A simple (one corrective leg) pullback on a daily can be a complex correction on a four hour. The rule of alternation states that you will see a simple and then complex. Why it is significant if you are a pullback trader is that if you place your stop directly under the pivot of the first corrective leg, you will get stopped out when it forms into a complex correction. You will also generally see a complex correction after a big run in price.
..and that candlestick takes up the entire range. Remember, I use the daily chart for the setup and four hour at times for entry. If you are a shorter term trader, that “pin bar” on the daily is a complex pullback on the four hour chart which then sets up a 130 pip drop. All depends on your outlook.
Tell me what you see on that pair. Honestly, I didn’t really look at the USD crosses for that week. In general, I do prefer the others.
Right…and I’d like to hear from you why you’d think it was a good setup or not.
I don’t trade support touches by themselves and as I have mentioned before in relation to support and resistance…how do you know that how you determine those levels is any better than random lines? Trading support and resistance as the textbooks teach is an approach that will end in failure. There is no edge. How I do it…there is an edge. You’ve heard it before, basing is one of my consideration. Also consider that the GBPUSD chart, using standard trending structure, is more a trading range.
Anything can happen with a pullback including strong momentum or no pullback but consolidation. After a big run in price where my trade got a huge chunk of the move, no need to be chasing every move. To that, the USDCAD is extended and I am a patient trader.
When I see exhaustion, I am looking for a sustained rally which means, I will generally ignore a pullback trade unless the rally lacks momentum.
Weakness, is playable.
EURCHF was at a potential turning point. At these zones, both sides are in play. While price went higher, I did not see a clear entry into the move even from the four hour chart. Upper and lower shadows on individual bars is a tough read.
Thanks SD, you have clarified my confusion there!!
Check the website Sunday nights. That is when it is generally updated.
Glad things are working well. Having an exit and trade management strategy is vital, as you know. Once you have gone 1R, there is no reason to ever find yourself in a losing trade.
The momentum push happened later in the swing down and was right into a potential support area. I read it as an exhaustion thrust.
Hi.am new here in, its my first day today 4th may. hope for much trading awareness.
We can only trade with what the market presents. The key is to stick to a strategy that has served you well. I have been asked several times about mentorship and have been offered some obscene amounts to do so. That is not something I am interested in doing but I appreciate the interest!
I don’t give exact entries and exits as we are dealing with financial instruments and the loss of money is real. That can open sites like mine up to a host of issues I care not to deal with. I give the potential setups.
That said, there are a ton of entry techniques on this blog.
You will also note from all the past setups that were posted, that when we are looking at any daily chart setup, I like to see the four hour for an early entry…especially on breakouts. The entry for Bitcoin was in the pre-breakout ledge around the 5300 level
good morning and good work you are doing. Do we need to input our emails repeatedly to unluck the free trading signals?
You shouldn’t. It sets a cookie on your computer so each time you visit, they should be visible.
Since I don’t set take profits or stop losses on the setups I post, how you handle it will depend on your trading plan.
On lower time frames you may get more of them but for me, I don’t trade to monitor charts. This was a beautiful example of a failure test trade.
Have any recommendation of books to read for price action?
Not really. Besides the few things I mention on my site here, I think price action as taught is overblown. Download this free guide on price patterns…..which makes more sense than the common “price action” trading: https://www.netpicks.com/go/pricepatternguide/
Hi Sd,I hope you are well. I was happy with the NZDCAD and I could not believe that it was one long 4 hour candle that made the big move down. After the poke above the resistance I watched the pair on the 4 hour and it was making lower lows which was setting up for the big move down. The pair behaved as you correctly predicted. It shows that with price action, if you take time to read these charts again and again you can correctly see where price may go and have another option at the same time if price does not behave that way.
These types of trades are the best. In and out. The test of high and the inside candle makes for a simple entry. Like I always say, I don’t change the approach every week to make things look good. It is the same handful of approaches repeated…..
You Opened My Eyes To Price Action Trading, I Must Say You’re God Sent God Bless You Man, Your Set up Made Me See Blues Always On TP
Hi SD- Thanks for this week’s set ups. What are your thoughts on the GBPAUD?
The trend is upwards but that moment staring from the bottom of the range worries me.
Absolutely. Any strong move from the bottom of the range is suspect. You can see what happened after the momentum thrust on this pair. Right now it is more of a range than anything and probably not worth the effort to look for a trader here.
Thanks SD – You are absolutely right, the pair does not seem to be going anywhere.
Hi Sd, the CHFJPY this week may have side footed a lot of people if they followed your forecast. Your forecast was short maybe because of the momentum candle on the 7th of March. I went long because I saw the failure test of lows on the 8th of March and I concluded that price cant go any lower because of that. My trade was triggered on the 12th and I am still in a trade as of today 15th March.
Greetings. Re-read what I wrote on the chart. I said the red candle could be exhaustion (which would indicate taking a long trade) or weakness. It should not have had
anybody short because I wrote looking for a lazy pullback to take a short. If anybody went short, they did so without any setup to do so.
As for a long pullback trade, momentum into the corrective move is not something I look for when taking a pullback trade. I will generally look for a lazy pullback and a measured move in the same direction of the momentum down. However, after the chart was posted we had a small range form which can work off the momentum move that has occurred. I don’t update the charts during the week. The four hour chart puts in a higher low on the 11th and the four hour consolidation sets up a breakout trade into the higher time frame pullback in price.
I don’t see a failure test and perhaps you could let me know what you consider to be a failure test. The small candle as seen on the setup chart, for me, is not a failure test. I would have had to see the low of the 8th taken out on the 11th off the four hour chart to see a failure test. Instead, it put in a higher low.
Be VERY careful with absolute comments such as “Can’t go any lower”. It certainly can.
Hi Sd, thanks for your very insightful response. I realise now that I did not fully read and understand the comments you made on the setup chart. Once again thanks for your comments and I also learnt some new things form your response.
You are welcome. You should however identify for yourself exactly what a failure test looks like and conditions for it. If you go to the four hour chart around your entry, if that higher low was not put in and we revisited the lows, there is a potential for a test. Why? Because on the four hour chart, you can easily see the momentum thrust lower that sets up the 2 day consolidation on the daily chart. That is the conditions and where you’d want to see it. Make sense?
Sd- Thanks again for your response. I have always thought that a bullish/bearish pin bar is a failure test of lows/highs.
Pin type bars can show up any place on the chart. It is what sets them up that makes the difference. Remember, we are not trading the candle…but what it means. As an example, if a chart makes a new high after a momentum run in price, pulls back shallow, runs resistance and price is rejected, that context gives weight to a pin type bar. If trading a daily pullback, the lower time frame may show an exhaustion thrust lower and then regain higher price via a pin type bar. That would be a failure test of lows in the context of a pullback on the higher time frame chart. It makes a good entry in that scenario.
Your gbpusd setup this week was quite uncanny! Should have set my pending orders earlier
Almost right to the pip before the pause. Entry from the four hour when price based right under resistance (wash rinse repeat)
Morning SD i would love to give your signals a shot but as a newbie i am struggling with time frames for your pairs ,as it seems i am going to have a great time here.Thank you in advance.
Hi SD, I had a good trade with the EURAUD. There was upward momentum and then a consolidation and a failure test of highs and I decided to go short on the pair. I am still in a trade right now and the pair has given 130 pips so far. I thought the failure test of highs was a good signal to go short. Was it a good idea to go for this trade? You did not post this pair.
That was an EXCELLENT trade in my opinion even if it didn’t work out. Even better was your explanation behind the trade as it sounds like how I would describe it. I would add in that the breakout of that range that produced the large momentum candlestick pointed to a reversal. Why? Breakouts that fire from the bottom of the range right through the top of the range, does not make for a breakout that will hold. Good for you!
Hi Sd – The NZDCAD continued from last week into this week and I also had a good trade. I tried to steer clear of the GBP crosses because there was too much talk about Brexit so I thought there would be too much volatility.
I don’t concern myself too much with rumblings. It can become a rabbit hole as you start to consider everything that is going on in the world. Find the setups, trigger the setups, and manage the trades.
Hi SD, Hope you are doing well. I had a good trade with the EURUSD. The pair broke out on the 4th and I am still in a short trade today 8 Feb morning. It was one of those pullback trades. You did not post this pair this week.
I didn’t post the EURUSD for a few reasons and one being it is a messy chart – more range bound than anything. If you flip to the weekly chart, those spikes are not something I care to risk on. Glad it is working out for you.
Hiya Shane, all took off on the 6th for some longs, didn’t it? I was late to the party ; need to monitor your setups more religiously!
The ones that took of in the other direction, no triggers. The others ones, pending orders through four hour structure. I am adjusting stops on trades as mentioned earlier. Patience and trust is a virtue in trading.
Absolutely. I’ll be using pending orders on your setups a lot more in future, and at the start of the week rather than monitoring. Sort of set and forget until triggered! I was off looking at other stuff this week so kicking myself.
For any newbies reading these exchanges I’d urge you to read & understand Shane’s post on Scale and Trail – you really don’t need to do too much to make profits from these setups; just apply the learnings and don’t let greed blind you from the steady profits that will come (using the r:r 1-1 and trailing stop method on the second trade, as described).
I use pending orders and usually off the four hour depending on the chart BUT it has to show some structure to trade off of. I don’t have an issue going in off the daily, just that the position size may be a little smaller do to the stop being a little larger due to the entry.
Glad you like the scale and trail. Some will have an issue because there will be times you give back but on the flip side, when they run (and many times a year they do) the profits can be obscene. The scale at 1:1 is a pat on the back profit taking for a job well done!
Many thanks for the awesome forex impactful insights through your free PA Course. I have a question though. I want to know whether I need to wait for the daily candle close at or near SR before scaling down to the 1 hour or smaller timeframe chart to hunt for signal or whether to wait for a signal to fully form on the daily chart before going to the lower timeframes to wait for signal at the same daily SR? Thanks a million for always being there for us.
That is a good question. I use the four hour chart as my lowest simply because of market noise. You don’t have to wait for the daily to close (which may be at 5 est or midnight) but it would make sense to wait to drill down until the strongest trading sessions are done. I have seen candles look bullish only to close down on the day as the selling steps in close to the close.
Hiya Shane, how’s it going? A tough couple of weeks to start the year but the same everywhere! Re the posts week commencing 3/02, there are a few of them which look like upside down head and shoulder patterns – which would endorse your long setups on these.
It certainly is a challenging time in most pairs (the AUDCHF collapsed today) but I don’t think I have seen any that triggered an entry and then fell apart. I had a scale out on the AUDUSD last week and a no risk position and that ended today. I have three positions – long in sugar, long in GBPAUD, and a short in eurgbp
The price structures are not great right now and momentum is stepping in to the opposite direction.
To be honest, I don’t look for head and shoulders. Momentum, direction, pullbacks and breakouts (variations of them). Too much info for me was never a good thing.
Happy new year and thank you much for the US/CAd trade setup. I am still short holding with 230 pips and taken some off for profit.s I only take the ones taht are really clear to me. You do a fine job thank you.
Great to read this. Thank you.
thank so much !
Hello, Happy new Year and thanks for your help. It’s possible for your you to tell us the daily trend for your pairs you gave us? this iformations will help us more. Thanks again and wishing you the success.
That’s assuming I use the daily trend. 🙂 I could use a weekly trend or even a directional bias as opposed to trend bias. The information I put on the chart should be enough for you to know what the trend is I am trading. Shorting….means down trend/direction. Buying….uptrend/direction.
Happy 2019. Hoping you have a great year.
i used the failure test on the EN chart from the 4 hour chart like you wrote and my trail stop was above high of red bar after thrust down. I did not get all of the move but 208 pips one trade. Was that good you think? You are right because the other charts did not do to much.
Hi Clarin and happy 2019 to you as well.
The failure test certainly was aided by the momentum move from lows to break highs. Generally, especially a range, if price thrusts up from the bottom of the range (or lows in this case), the moves are often times short lived. This gives rise to the failure test (upthrust) and immediate reclaiming of lower price.
The trailing stop is fine. If you go back to the daily chart, you will see a measured move of 1:1. Jan 3 high to low of Jan 7 projected from high of Jan 10 comes in around 1.6752. Good job!
did you short the EURNZD and what was the outcome ??
This blog is not a documentation of my own trading and rarely comment on any move I make in the market. I do post up from time to time trades where there is something to learn. My swing trade is currently a long in Natural gas since Thursday.
You helped turn my tradin g around in 2018 after 4 years of hit and miss. I wish for you a best 2019 and blessings for your life. Thank you
Hey Benny! Awesome to hear! You take all the credit my man, I just gave you a path.
it is impossible to see the prices on your charts so how does one uses them ?
It’s not the prices that are the most important thing. These are daily charts and it’s the action and market state we are looking at. Bring up your charts and look for the same type of pattern or chart formation. You can, if price is important to you, open in a new window and zoom in. You can compare yours to mine and see a relationship, no?
Thanks for sharing. I’m certainly a beginner, i was looking to see BUY or SELL a particular pair. how do i know which pair to buy and which to sell.
Beginners may have an issue at first but you will quickly get the hang of it.
Take the first chart, the AUDCHF: It is calling for shorting which would be selling the AUD and buying the CHF.
In essence, I am looking for eventual AUD weakness against the strength of the CHF
This site is much different than the others. I lay out my technical look at a currency pair, in the above case selling the AUD from a pullback in what is a downtrend on both the daily and weekly chart. Other context is in play but is far too much to go into here. You will see it on the charts at times and at the end of the week.
I don’t think holding hands is a good approach. You have to find your way around the charts, how to enter and such…and this site is an excellent resource (so I am told).
Not saying I am always right (I’m not) but my approach is different.
Like I mentioned, it’s different. I remember months ago in this very comment section (some of you may remember), one visitor was mocking me for wanting to buy the EURUSD when “everyone” wanted to short. Didn’t take long before the “everyone” was on the wrong side and the EURO jumped upside.
You can read about it here: https://forextradingstrategies4u.com/selection-comments/ and here https://forextradingstrategies4u.com/do-your-own-work/
Thanks for your effort in educating us, this is one of the sites that I cherish alot because its fully loaded. My observation is that you have brought to bear those pairs that traders most times neglect or thinks that not much can be gained from. Thanks a million you are truly a Mentor
Thanks. I don’t write many blog posts anymore because I think the weekly setup charts are much better.
As for the charts, I actually look at non-US crosses first as they are not as affected by U.S. news. I make much more trading those as opposed to any USD cross.
I look for pairs that are demonstrating moves that have a true edge in the market and the context it forms in. What I look for is truly evident in every chart I post.
How do you select/filter the pairs for the week of trading? I’m working to minimize the amount of time on the weekends upon technical analysis.
I know what I am looking for on the chart and have been doing it for well over a decade. Stick around or check the archives, you will see the same approach every week and the explanation of how price played out on the next update. Thanks for coming by!
Thanks so much! I’ve already learned a lot from the site. J
Thanks for saying it Juan! I am happy to hear from those who are getting something out of my work!
Thank you for the signal…I will follow and see if they trigger or not….Also, I will like to see if the Trend reverse or it continues as suggested after the supposed PullBack…Once again, Thank you for posting.
Thanks for reading. Well, it is not a supposed pullback, that is what price is doing. If momentum steps in to the upside or the pullback ends up in a range, the pullback has failed. The range can still be played but the momentum not so much. As for trend, you have to know which trend you are referring to and how you quantify trend.
the signals are for which day of the week and at what time?
Hi Emma. I suggest you re-read the introduction on the setup page: https://forextradingstrategies4u.com/forex-trading-signals/
These are swing trades and not specific to any day of the week. These can trigger in on Monday and run the whole week or fail to setup.