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Aussie / Yen - Head and shoulders reversal, bullish - LONG

已更新

Very interesting pattern developing on this pair, I've already mentioned about the increasing strength of the Aussie dollar, and the weakning of the YEN. If we see a valid inverted H&S pattern, known as a "bottom", this is a bullish reversal sign. I'm already long from the left shoulder on a short term trade, but should this trade pattern prove positive, I will hold it until the full heigh of the head, which gives us a target of the next fib level in green.

交易進行

Trade active 16/05/18 - 22:03 - 82.48

註釋

We're currently entering the major resistance zone, moving averages have crossed over at 82.4 in a bullish move, but RSI and volumes are declining while the trade is rising, this divergence signals a bearish intention.

交易結束：目標達成

I've closed the trade and taken profits. I'm selling down to 82.5 and will then go long again once I see further strength. Divergence on the 1h time frame is my logic for this trade. If I held a position much lower, I wouldn't do hold the trade through the European and UK opens. Let's see what happens.

交易進行

Selling to 82.2 before going long again

註釋

This will invalidate the H&S pattern right now.

註釋

Take your profits and sell down to 82.3 now

註釋

So why have I reversed my trade for short-term profit. Simply put, when there is a divergence in volume, the (opposite of the trade), trade long, volume down, it's not a sustainable trade.

Great, so we make some short-term money, get a better position below with more bulls. Does it always work, of course not, this is the free market, anything can happen and it's crazy Friday.

註釋

The pullback is happening .....

註釋

It's fighting back, but it's pointless, divergence is still present, much larger volumes are required to get it through the highs, I think a pullback is needed to bring in the buyers. Patience. Their just numbers.

註釋

As I was saying.....

註釋

We had a gap upon opening, but the top was rejected, which is a good sign for our pullback before getting into the trade proper, we'll have the JPN trade balance tonight which will give us a definitive answer whether I was wrong to chase a short-term profit or not.

註釋

Well, I did say it was short term and clearly waiting the weekend for the quick pullback failed. We are approaching the baseline of the reverse H&S pattern, I'm waiting for the breakout of the baseline, a successful pullback, hold the baseline as support and then I'll enter with the target up to the highs, this will be a great trade.

註釋

The pull back has started....

交易進行

Baseline has been broken, pullback, held, the second pullback and held, nice tail, perfect candle to signal an entry. Now let's see it break 83.650 and move into the uptrend. Moving averages confirm it's in place, now let's see the reversal

交易進行

We're breaking free of the baseline and we are active and long

註釋

Declining volumes and now a rejection of the baseline, if the selling increases, not good. Patience, London has just opened.

手動結束交易

I've closed my trade at break-even, it looks like it's going to need a deeper pullback to 83.5 or more to get break those highs, the volume is declining also

交易進行

I think we can now confirm we have a H&S breakout and a confirmation of a reversal, it's going to be a lovely risk / reward ratio on this, find a pull back and join in.

註釋

Turning into a beautiful move the upside, wait for pullback and get in, we have a long way to go and it will get there.

註釋

Very interesting trade, it's out of the way of the Euro, Sterling and USD craziness, so their just getting on with it. The trade is now at a major area of confluence, not only is just under the 200 day moving average, but this is the 50% retracement of the move down, so we're obviously going to get some selling pressure, which is reflected in the volume, but the RSI and price action of various timeframes is showing me this is short term and I need to sit tight and be patient.