In this video:
00:40 Reversal Patterns in your trading
02:14 Trading on continuation patterns quite a lot
02:56 Overall +1% up for the week
04:48 Made a 3.6 to 1 risk to reward trade on the daily charts
06:02 Seen some strength in the USD, Swiss Franc and GBP
Hi, in this video I’d like to talk about continuation patterns and reversal patterns so let’s start now.
Hi, it’s Andrew Mitchem here, the Forex Trading Coach.
Reversal and Continuation Patterns
Today is Friday, the 21st of June. And remember last week I said I was going to talk about continuation patterns or reversal patterns so that’s what I wanted to start with on today’s video. When I’m trading I’m looking for one or the other so in other words if we were in lets say in uptrend at the moment and we saw a pattern to go short and it looks like it’s an over-bought area and we’ll then looking after large uptrend to sell a currency that is what I call a reversal pattern. It looks quite dramatic on your charts because you’re finding that most people are buying a currency and then all of a sudden I’m entering a short position and taking that pattern. But I’m only taking that short position after I’ve got confirmation that it looks like the currency pair that I may have topped out and now it looks like that it’s going to reverse so that’s a reversal pattern.
The continuation patterns, probably a slightly safer pattern and it’s one that I have a couple other indicators and other things I’m looking for to backup the continuation pattern. But overall on a chart this is what we’re looking for.
Let’s say we were in a large uptrend and then we already had that pullback but that pullback goes only so far and so we’re getting like the pullback, say a retracement of the previous uptrend so the retracement back down after an uptrend. And then after we’ve had that pullback down again then what I’m looking at doing is seeing some form of pattern there some form of candle pattern and other indicators, maybe a support resistance bounce whatever it might be but primarily based on a candle pattern saying nows the time to go long again for buying that currency pair after it’s had a pullback but bearing in mind that the overall direction has been up then it had a pullback and then we’re looking at going long again.
And so I trade those continuation patterns quite a lot. I find they’re very safe because it means you’re trading with the overall in this case uptrend but after we’ve had the pullback looking at going long again so you are trading with the predominant trend. But its two patterns that I trade I look for all the time, I also teach that on my course. So just wanted to let you be aware of the two types the reversal patterns and the continuation patterns. Two very, very powerful slightly different but very powerful setups to look out for on your charts.
1% account gain this week
On to my trades personally this week. I’ve had a slightly tougher week this week. Had some good trades and a few loosing trades. Overall I’m about +1% up for the week right now and I still have Friday to go, being Friday morning here in New Zealand, we still got the entire day to go. And I have taken quite a numbers of trades today. But overall for the week on my set and forget trades that all my clients get I’m up just over +1% for the week on closed out trades and on a EUR/GBP breakout system that I use, it’s set just once a week, it’s a breakout system that’s part of my strategy. I’m up +1.5% on that so that’s a close at +1.5% for the week for a profitable week on that strategy.
But on my other charts on the few other daily charts I’ve taken and some four hourly and it’s a one hourly down around 1.5% for the week and so overall net I’m up just over +1% for the week on closed trades with behind me here a good number of trades open. So if they come through then I might end the week on around between a 2-3% gain depending on how these trades go here. But whatever they do I will be closing pretty much all of them before the end of the trading week.
High Reward:Risk Trades
A couple of trades I wanted to point out. Now these trades were both mentioned to my clients yesterday so on Thursday and one of them was to take a short position on the EUR/USD. Now throughout the day the EUR/USD moved 140 pips from its high and its lower point and the trades that I took and suggested made 124 pips. So it’s a pretty amazing trade. It made 124 pips out of a total daily range of 140 pips with that trade with a stop loss it made a 3.6 to 1 risk to reward.
So if you are trading let’s say for round numbers a 1% risk on that trade, you’ve had made 3.6% gain on that one trade so very high risk to reward. The other trade that I suggested to my clients yesterday also hit full profit was the NZD/USD. And that trade moved 183 pips throughout the course of the day. And I picked up 152 pips on that trade. But remember the profit target and the stop loses were set at the beginning of the day. I didn’t know it’s going to move 183 pips throughout the day but my profit target was set at 152 pips for technical reason but you can see what a great trade again that was that made a 3.2 to 1 risk to reward so in other words risking 1% of your account on that trade it made 3.2%.
So two fantastic trades there very, very small draw downs on those trades and both reaching their profit target and exiting for full profit within the 24 hours of the day so two really great trades there.
USD Strength and Commodity Currency Weakness
Overall on the charts right now today I can seen some strength in the USD also strength in the Swiss Franc and there’s been renewed strength in the GBP towards the end of the week. Weakness, it’s been the commodity pairs again or currencies again. We’ve seen weakness in the AUD, huge weakness in that again, NZD, CAD and also on the gold and silver and silver itself against the USD is now down to a level that we’ve not seen since September, 2010. It’s now down below 20$USD an announced. So a very low levels there and right now they still look like they’re continuing to fall as I’m looking behind my charts before I started this video. So gold and silver falling, AUD, Kiwi, CAD still continue to fall.
I’ve had some great feedback from people again this week, some fantastic emails and also people who are following me on Forex Peace Army reporting that they are making excellent profits from just following my daily analysis of the market.
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So thats all for now, have yourself a fantastic weekend I and look forward to talking to you this time next week.
Bye for now.