Ok guys, I apologize for the absence, I decided to stretch my mini vacation a bit, but in the next week full focus on the market again! Always try to have a few moments to relax and forget everything about the market for a few days, it is very important to maintain the psychological balance for those who trade daily in a market that is always under stress/pressure.
[XBTUSD 1D CHART]
We recently had a formation of an Inverse H&S reversal pattern, the break up at the neckline was quite consistent, with large candles accompanied by good volume. Then the price made an almost perfect pullback on the neckline, where there was the possibility of making a very well planned and low risk entry.
We recently had a formation of an Inverse H&S reversal pattern, the break up at the neckline was quite consistent, with large candles accompanied by good volume. Then the price made an almost perfect pullback on the neckline, where there was the possibility of making a very well planned and low risk entry.
XBTrade
[XBTUSD 1D CHART] We recently had a formation of an Inverse H&S reversal pattern, the break up at the neckline was quite consistent, with large candles accompanied by good volume. Then the price made an almost perfect pullback on the neckline, where there…
It is not a perfect IH&S, but it has a satisfactory structure to be considered a reversal pattern.
Looking more closely, we can see that we are in a consolidation zone, squeezed between the yellow band and the green band.
In yellow we have an important support, which previously was very strong resistance and also the neckline of IH&S. As long as we are above this yellow band, I still believe in an attempt to break up the channel.
According to the basic principles of technical analysis, a consolidation below a resistance or trend line is a signal of strength and the expectation is of continuation in the previous trend.
In yellow we have an important support, which previously was very strong resistance and also the neckline of IH&S. As long as we are above this yellow band, I still believe in an attempt to break up the channel.
According to the basic principles of technical analysis, a consolidation below a resistance or trend line is a signal of strength and the expectation is of continuation in the previous trend.
To be more objective, it was very unlikely that the price would break above the channel resistance on the first attempt of the current movement. A consolidation above the yellow band would be perfect for taking a breath for a consistent pull.
In technical analysis we do not predict movements, we work according to probabilities and need to be prepared for any kind of situation. My biggest expectation is for a break up, but if that doesn't happen, I already have a trade idea ready to take action.
I will be looking for an entry in SHORT if the price consistently breakdown the yellow range. In this case I could enter at the pullback or watching some interesting "live" pattern.
I will be looking for entry to LONG on two occasions:
1 - If the price goes back to the yellow band and leaves a short term reversal pattern, indicating a possible rise.
2 - If the price can consistently breakup the resistance of the descending channel.
1 - If the price goes back to the yellow band and leaves a short term reversal pattern, indicating a possible rise.
2 - If the price can consistently breakup the resistance of the descending channel.
As you may already know, my style is swing trade, so I don't even look at charts below 4H because they don't help me at all. Now that I have these zones mapped out, just wait and see how the price will react next to them.
If necessary I will bring updates based on price action.
If you want to chat with me, just join my chat > @XBTalks
If necessary I will bring updates based on price action.
If you want to chat with me, just join my chat > @XBTalks
XBTrade
To be clear, I drew red bands that are my points of interest.
Great move as expected, the 4H candle closed showing a lot of strength. I will look for a possible entry in LONG.