Michael J. Huddleston
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What We Will Cover This Month 1) Long Term Perspective 2) Determining The Range 3) Focusing On Probable Reactions 4) Implementing Market Structure Shifts 5) Forecasting Potential Direction
Begin With Monthly Charts The Long Term Insight Has Significant Impact On The Near Term
This example is not in any way a hindsight after the fact scenario. I called this move in advance and you can see this on my YouTube Channel here => http://youtu.be/1gqnoteipgg
We will be using this example in Price Action to teach this concept as it is anchored to a Live Analysis.
Study this chart closely and see if you can spot some of the obvious points about this particular portion of Price Action?
S&R Clear Level Both Roles Old H&L An Old High An Old Low
Range High The Current Range Range Low
Range High The Range need not be broken to make money. We can Trade inside the Range and profit! Range Low
Range High Let s note some crucial and otherwise obvious points about this area in Price Action. Range Low
The 1.50 level is an obvious Support & Resistance level. The Fib overlaid on the range we determined shows an OTE [Optimal Trade Entry].
Let s zoom in closer and study this portion in Price Action further and begin to break down the concepts as you would in your Demo Trading.
The Range between the Low on this Monthly Swing Low and the High on the 3 rd Candle completing the Swing Low Pattern is your Intermediate Term Dealing Range. We will move down to a Weekly Chart to further study this Price Action.
Intermediate Term Dealing Range High Intermediate Term Dealing Range Low
We as developing Professionals aim to control fear & greed and by that premise we refrain from chasing Price. Electing to rather wait for Price to retrace inside the Dealing Range and stalk a potential Buy Signal
We see Price did in fact retrace inside the Intermediate Dealing Range. We see a nested OTE pattern now unfolding and we can now move down to a Daily chart for closer analysis
Study this Daily chart and see if you see anything that stands out in our list of clues we stalk? See any S&R levels, Old Highs or Lows?
Old Lows in OTE zones and after retracing inside range. We can note these lows and drill down into Intraday Lower Timeframes to stalk an entry pattern on those timeframes where we employ OTE patterns for Trade entries
Let s move down to an 60 minute chart to start really breaking down this Price Action using the same concepts we used on the Monthly Weekly Daily charts
Looking at the 60 minute chart we can see the 1.5025 level was finding Support as we anticipated based on the Longer Term Macro to the Micro perspective. The yellow & inner white rectangles depict the higher timeframe OTE zones.
We will drop down to a 5 minute chart to hunt a setup to illustrate how developing the Directional Bias with this simplistic and uniform approach can aid you in your demo Trading and development as a Forex Trader. Let s drill in to this level here
Do you see how after bouncing at the predetermined Support at 1.5025, Price gave further insights in the Bullflag formation? Let s look closer at Price when it dropped into 1.5025!
The addition of the Asian Range on the day the Cable [Gbp/Usd] traded down into the 1.5025 Support level illustrates how the Smart Money accumulates inside the Asian Range and more importantly and what makes my concepts unique. Buying under the Asian Range High. The Price is determined by the Fibotool as illustrated and the Timing is driven by Session Openings and Closings. In this case let s see when the OTE formed and found Support on our predetermined 1.5025 price level.
The overlap of London Open & Asian Close was the Timing factor in this trade setup. By having first laid the ground work in Long Term Macro Perspective on the Monthly, Weekly, Daily, 60 minute and finally 5 minute basis we can arrive at a Directional Bias. Stalking trades only in this direction is recommended while first developing as a Demo Trader. It will provide the building blocks needed to assist you in more advanced counter trend trades. Let s take a look at the results this trade entry offered those savvy enough to see the signs and clues Smart Money provided the Traders in Cable
As you can see here over 700 pips was the result. I m sure you are still full of questions and I haven t exhausted my treatise on the topic we will build on these foundations. Again, I council you to view the YouTube video I posted before the market traded as detailed here.
700+ Pips Directional Bias Trading