However.. We have just broken out of, and closed above, a significant level 1260, and we're floating below another even stronger psycholocial level - 1300. This higher level could act as a magnet and drag us up through another bullish move to reach. Although, there is possible we do see a retracement first back to 1260 before testing 1300 area.
So what Im saying is, I am not shorting here in respect for 1300. If we had this same scenario, but at the 1300, then I would definitely short.
But..IF I were to short here, I would target 1260 which would be both a 0.618 retracement and a psychologial level, perfect for booking profit. And possibly a long opportunity with target 1300. :)
I do have another question if u dont mind.
I am quiet new to forex (4-5month on and off with uni) and i am currently trying to develop my trading strategy, but i keep overcomplicating it and end up missing entry points.
Like i said previously the way you make your charts look is amazing, so simple, although im aware there's probably a more complicated analysis behind it. Anyways if you have any advice for an ambitious starter I am all ears.
I think, developing an understanding of why markets move is one of the most important things. Identifying key areas, and with experience identify situations and the common reaction to that situation or key area. Building a case to enter - And to actually enter where you have set out to enter are the last critical points. Targets and stop losses should be set with the same principle of where to enter. Where is the price most likely to go, and if it goes against me - where should I consider myself to be wrong?
Key areas often coincide with psychologial numbers, as 1.500, 1, 0.9500, 0.800 etcetera, round even numbers. Another thing making a key area is the tendency to support, or resist, the price going further. And once it has broken through, that resistance instead becomes support. Like shooting up through the roof, and then finding support on the roof itself. There are also the support and resistance involved with trends. When waves make a clear and recognizable diagonal line that price struggles to break through.
I would suggest learning the following;
> Candle stick formations, and common patterns
> Fibonacci, the meaning of it and how it affects price
> Trend and trendlines, how breaking a trend line could affect the price
> Overbought and oversold conditions, where RSI is a good tool.
> Horizontal support and resistance areas, structure.
> Top down analysis, look at the monthly chart - where did previous months struggle to close above or below, and then continue with weeks, then daily. When you finally do your analysis on four hour and hourly you will have critical areas pointed out that most likely would not be seen looking directly at the hourly.
Focus on a few number of pairs. I started with 13 pairs, now I'm down to 6. If you are studying I would not recommend more than 4-5 pairs max. 4-12 planned out trades a month is better than 200 trades that in total generates loss. Its also easier for you to follow up and evaluate yourself afterwards. Take printscreens of your before and after, and question yourself. Treat it like a business.
And, you will have losing periods. If you look at my four(I think) latest charts, they are all losses. But there will be times when there are 4 winning in a row instead. Although, even if Im trying to be as transparent as possible, there are some trades taken in between those four charts that I only mentioned on my telegram and not here.
I am an expert in over analyzing and complicating things, so it has been a challenge to simplify it all down to this, and I'm still learning.
Thank you very much