Our winning patterns for week ending 2020-12-11
EURCAD Support on the 1H chart.This was our first adventure with EURCAD – second one was later in the week when we traded support with breakout. We noticed this formation after pricer dropped 1000 pips. Such a plunge, usually ending with a temporary pause in trend. And this is what is happening here. Please see S-V3 oscillator – higher timeframe line hovering on the bottom and only lower timeframe line oscillate between top and bottom. That is a strong signal of firm support. We can leverage that knowledge and use it to make some money. Opening Long position here is a good idea as there is a great potential for easy profit.
Support with breakout
EURCAD Support with breakout on 1H chart. That was our second trade for same support formation. This time we notice that sellers becoming inpatient and entering market quicker every time when price starting recovering. That creates a descending triangle with lower highs and a flat base. S-V3 indicator straggling to reach top, which is a good signal of big selling pressure. All these observations lead to the conclusion that price is about to drop. And we were right. Downwards breakout pushes EUR 300 pips lower. It looks like our descending triangle was only a brief stop on the journey to the lower lows.
NZDUSD channel on the 1H chart. Here we have a splendid example of how important is to have great, professional trading tools. Trading is like predicting future price moves to make a profit. But our prediction should be supported with excellent strategy and correct informations. Without proper preparation, trading is becoming gambling. Back to our trade we see that NZD price was climbing – higher lows. We don’t where the next pick will be, but we know that it is already higher than the previous one. And here comes S-V3 oscillator. We see that both lines are at the top of indicator and the last candle looks like a shooting star. Now we draw support and resistance line and we have channel. So far, so good. Last thing to do is to open sell position with a limit somewhere in the middle of our channel. We do this as price might revers and go up. After all, we are here to make a profit. And we did.
AUDUSD resistance on the 1H chart. This one is a reversed example of our support with breakout, but this time we having resistance with breakout. Have a close look on the chart and notice price forming higher lows and flat top. This ascending triangle shape shows that buyers are strong and ready to push price higher. They are pushing market higher as soon as sellers starting to drop price down. Flat resistance won’t hold for long with such demand. And if you are paying enough attention, you probably noticed that our ascending triangle is a part of massive uptrend. You could argue that this is trend reversal in progress because there are no higher highs. This is mistake make by unexperienced traders – higher lows, flat top resistance and leading uptrend are indications for price going up.