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GARTLEY ABCD - EUR/USDA Setup as Simple as ABCD Today, I would like to show you one of my favorite Price Action trading setups called AB=CD Setup. You can use this setup both for intraday and for swing trading. In this post, I will show you the AB=CD setup on a Daily chart , which I use for my swing trade analysis. How does the strategy work? The AB=CD setup is based on the market psychology and on the fact that the price does not usually move without corrections (pullbacks). How to use it? Exact steps: First you need to find significant swing points. I will call them A and B. Then you need to see a correction which goes at least to 50% of distance from A to B. n this example, the distance from A to B is 319 pips. So, C must be a swing point, at least 160 above B. You can use standard Fibonacci tool to measure the distances. After identifying C, you need to look for D. D is the same distance from C as A is from B. In this case 980 pips. So, what you do is that you simply move the Fibonacci tool you already have in your chart so it begins in the point C. Important thing is that you just move the fibo. DON’T CHANGE THE DISTANCE it measures. This will point you to the point D, which will mark your resistance. Below is the same chart, with Fibonacci shifted so it shows C and D. The reason this setup is called AB=CD is because the distance from A to B are the same as distance from C to D. D marks the support you can go long from. Trading AB=CD as a standalone strategy You can trade this setup as a standalone strategy but I personally prefer to have some more confluences with other strategies which would confirm the support/resistance levels this AB=CD method shows. It would be best if there was some significant volume area created around the point D in the past. Still, the AB=CD setup on a Daily chart is a strong signal and I think we can expect a reaction there. Happy trading Dale
Long
by Trader_Dale
A Significant Support on EUR/USD Failed 💣Support on EUR/USD got breached Let’s first start with looking at a Daily chart of EUR/USD. There has been a pretty significant development! Significant support (from Daily time frame) got breached and now it seems that lower prices (below this support) are being accepted. This would mean that this support will become a resistance. Currently, it is still a bit fresh, but if EUR/USD really closes this week below this support (which it already breached), then it will be a strong signal that a new resistance got formed and that strong sellers are taking over. Check out the picture to see what I have in mind. It is a Daily EUR/USD chart... As you can see from the picture above, there were many strong rejections of this support in the past. I marked them in the chart. Yesterday, the Daily candle closed below all those rejections and today’s current development gives a chance that today’s daily candle will close even lower, confirming that the support became a resistance. Let’s have a look at a lower time frame It seems that we have a strong resistance zone, but where EXACTLY to enter a short trade? In situation like this I often switch to lower time frames, preferably a 30 Minute time frame. Then I use the Volume Profile and I look for significant volume area to go short from. In this particular case, the zoomed-in situation around the new daily resistance looks like this (30 minute chart, EUR/USD) Bingo! Now we have an exact level (1.0999) from which we can go short from! We can go short with an intraday quick trade as well as with more long-term swing trade!
by Trader_Dale