What Is Ichimoku Cloud and How Can It Be Used in Crypto Trading?When non-traders think of trading, they often envision an indicator like the Ichimoku Cloud: a seemingly indecipherable mess of lines and colours. But in reality, the Ichimoku Cloud is logical, once you understand it, and quite an effective tool. In this article, we’ll take a look at what the Ichimoku Cloud is, its interpretation, and how you could use it as part of a crypto trading strategy.
What Is the Ichimoku Cloud?
While the Ichimoku Cloud may look like a complicated indicator, it's a highly versatile tool that can offer traders a quick snapshot of the market. The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, was developed by Japanese trader Goichi Hosada. He spent around 40 years working on and refining it, finally publishing his findings in the 1960s.
At a glance, the Ichimoku Cloud can help traders gauge trends, forecast support and resistance levels, and determine potential entry and exit points. It combines multiple technical indicators into a package that can be incredibly effective if used correctly. While not initially built for crypto, the Ichimoku has gained popularity amongst crypto traders for its ability to adapt to the fast-paced and volatile nature of cryptocurrencies.
Understanding the Components of the Ichimoku Cloud
To get the most out of the Ichimoku Cloud, it's essential to understand its six primary components.
Conversion Line (Tenkan-Sen): This line (blue) is calculated by averaging the highest high and the lowest low over a specified period, typically 9 periods. It serves as a dynamic support and resistance level and helps identify short-term trends.
Base Line (Kijun-Sen): The Base Line (orange) is the average of the highest high and the lowest low over a set period, usually 26. It functions as a relatively stable support and resistance level and can be used to determine medium-term trends.
Leading Span A (Senkou Span A): The Leading Span A (green) is calculated by averaging the Base and Conversion Lines and plotting them 26 periods ahead. It forms one of the Kumo’s edges and indicates potential future support or resistance levels.
Leading Span B (Senkou Span B): Calculated by averaging the highest high and the lowest low over a longer period (usually 52 periods), the Leading Span B (red) is also displaced 26 periods ahead. It forms the other edge of the Kumo and, like Leading Span A, represents potential future support or resistance levels.
Lagging Span (Chikou Span): The Lagging Span (purple) simply shows the current closing price, plotted 26 periods in the past.
Kumo (Cloud): The space between the Leading Span A and B. If Leading Span A is greater than B, then the Kumo will turn green. If A is less than B, the Kumo will be red. The Kumo is a leading indicator and can show whether the market is in a downtrend or an uptrend, depending on its colour and the relative position of the price. To avoid confusion with the indicator and the Cloud, we’ll refer to it as the Kumo in this article.
Ichimoku Cloud Crypto Settings
Unlike most other financial markets, the crypto market trades 24/7. The original 9, 26, 52, and 26 periods for the Conversion Line, Base Line, Leading Span B, and displacements, respectively, were designed for the Japanese working week and aren’t suitable for crypto.
Thankfully, traders have already worked out the best Ichimoku settings for crypto. To match up with crypto’s trading hours, many change the indicator periods from 9, 26, 52, and 26 to 20, 60, 120, and 30.
Put simply, the revised Ichimoku Cloud settings for cryptocurrency are:
Conversion Line: 20 instead of 9.
Base Line: 60 instead of 26.
Leading Span B: 120 instead of 52.
Displacements: 30 instead of 26.
Ichimoku Cloud for Crypto: How to Use It
Now that we have an understanding of each Ichimoku Cloud component and what settings to use, we can start interpreting its signals. Let’s look at four key aspects of using the Ichimoku Cloud.
Want to see how it works for yourself? At FXOpen, we offer the free TickTrader terminal, where you’ll find a full suite of technical analysis tools, including the Ichimoku Cloud. Just adjust the settings to the ones given to follow along in real time.
Timeframe
The first consideration is the timeframe. The Ichimoku Cloud was originally designed to be used on the daily chart. While it has uses on the 4h and 12h charts, it's best to avoid using the indicator on most intraday timeframes, as it has been known to generate false signals.
If you’re determined to make it work on lower timeframes, you could try shorter periods than the original settings. However, it’s important to gain a deep understanding of the indicator and how it works in practice.
Identifying Trends
One of the primary uses of the Ichimoku Cloud is to identify market trends. When the price is above the Kumo, the market is considered bullish. Conversely, if the price is below the Kumo, the market is bearish.
If the price moves within the Kumo, the market is in a consolidation phase and shouldn’t be traded. Additionally, the colour of the Kumo can help traders understand the trend's direction: a green Kumo signals a bullish trend, while a red Kumo indicates a bearish trend.
The Lagging Span can also be used to confirm a trend. If it sits above the price and the Kumo, then traders have confirmation that the market is bullish. If it is plotted below both price and the Kumo, then the market can be considered bearish. Note that the Lagging Span is a confirmation tool, and traders use it after setting a bias based on other aspects of the indicator.
Finally, the distance between Leading Span A and B (forming the Kumo) can help traders gauge the trend’s strength. A narrower Kumo indicates that the trend might be weak, while a large Kumo can mean the trend is strong.
Catching Momentum
The Ichimoku Cloud can help traders identify and catch market momentum, providing valuable opportunities to enter and exit trades. When the Conversion Line crosses above the Base Line, it may signal a bullish momentum, whereas a crossover below the Base Line can indicate bearish momentum. This is known as a TK Cross. Additionally, a widening gap between the Conversion Line and Base Line can suggest that the momentum is increasing.
The Kumo’s position relative to the price also provides vital information about momentum. If the price moves above a rising or below a falling Kumo, it can signify strong bullish or bearish momentum, respectively. Conversely, if the price moves against the Kumo’s direction, it could imply a weakening trend or a potential trend reversal.
Support and Resistance
Lastly, the Ichimoku Cloud can provide traders with dynamic support and resistance levels. These levels can be used to find entry and exit points that align with a trader’s overall analysis of the indicator.
The Kumo’s edges, formed by Leading Span A and Leading Span B, act as the primary support and resistance levels. In an uptrend, the Kumo’s upper edge (usually Leading Span A) serves as support, while in a downtrend, the lower edge (usually Leading Span B) acts as resistance.
It’s also possible for the opposing edge to hold as support when bullish and to pose resistance when bearish, but this would put the price inside of the Kumo. As mentioned earlier, it’s best to avoid taking a position inside of the Kumo, but it can help traders prepare for an entry if the level holds and the price reemerges from the Kumo. However, if the price breaches these levels, it could signal a potential trend reversal.
In addition to the Kumo, the Conversion and Base Lines also serve as minor support and resistance levels. When the price is above the Conversion and Base Lines, they can act as support, while if the price is below them, they can serve as resistance.
Ichimoku Cloud for Bitcoin and Other Cryptocurrencies: A Strategy
Using these interpretations, we can now begin to formulate an Ichimoku Cloud crypto trading strategy. We can set specific criteria that must be satisfied before considering a trade; then, we may set actual entry criteria.
Consideration requirements:
1. If bullish, the price must be above the Kumo, and the Kumo must be green. If bearish, the price should be below, and the Kumo should be red.
2. In an uptrend, the Lagging Span must be above the price and the Kumo, and vice versa.
3. If bullish, the Conversion Line must be above the Base Line, and vice versa.
Once we have the green light on these three requirements, we can identify possible entries:
1. If only waiting for the Conversion to cross the Base, we can enter on the crossover.
2. If all three requirements are already met, we may enter on a retrace to the Conversion or the Base Line. Entering on the Conversion Line can be considered riskier, while waiting to enter the Base Line may mean missing opportunities.
3. We can make an entry after confirming that Leading Span A (if bullish) or Leading Span B (if bearish) is acting as support/resistance.
What about stop losses and take profits? For stop losses, you can try at the opposing edge of the Kumo or use another technical factor altogether for a tighter stop. Take-profit levels are tricky to set with the Ichimoku. You may prefer to simply trail a stop above or below the Kumo, depending on the direction of your trade, or close the position when the Conversion line crosses back over the Base.
Let’s take a look at each possible entry in practice.
Conversion-Base Crossover
Here, we see clear bullishness confirmed by both the Lagging Span and Kumo. The only missing piece is the bullish Conversion-Base crossover. Once we see the crossover occur, we can consider an entry.
Conversion/Base Retrace
Similarly, we see a very bullish market, with almost every signal of the Ichimoku Cloud pointing to a strong uptrend. When the price pulls back to the Base Line, we can look to enter a position.
Kumo Support/Resistance
In this example, we see a substantial bearish trend, marked by a large Kumo. With each of our three consideration criteria met, we can wait for a pullback to either the Leading Span A or the Base Line to make an entry. Luckily, both lined up at roughly the same area, giving us extra confirmation that the level was likely to hold as resistance.
Limitations of the Ichimoku Cloud
While the Ichimoku Cloud is undoubtedly a versatile and insightful tool, it doesn’t come without limitations. One is that its uses are fairly limited intraday; the short-term volatility of cryptocurrencies and many other asset classes can lead to increased false signals and trouble interpreting the indicator.
It’s also ineffective in ranging markets. It can excel at offering entries in trending markets but may generate conflicting or ambiguous signals in a range, making it difficult to identify clear entry and exit points.
Lastly, the Ichimoku Cloud is more complex than most other indicators, with multiple signals and ways to interpret its readings. This can lead to confusion and a steeper learning curve.
Closing Thoughts
Now that you have a comprehensive overview of the Ichimoku Cloud, why not try applying it to your favourite market? It doesn’t have to be crypto either - you can just switch back to the original settings if you’re looking to use the Ichimoku Cloud for forex, commodities, or stocks.
The same ideas, uses, and strategy rules given here can still be applied to these markets, but you may need to look for your own methods for using the indicator in specific markets. Once you feel like you have a solid understanding of how to apply the Ichimoku Cloud, you can open an FXOpen account. You’ll be able to access dozens of live markets and advanced analysis tools in the free TickTrader platform alongside low costs and tight spreads. Good luck!
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Movingavarage
Navigating the Golden Realm❣️"Unveiling Secrets of the Gold Market for Traders"
Welcome to the captivating world of the gold market, where you as (new) trader embark on a metaphorical journey filled with price movements , trends , and profitable opportunities .
In this comprehensive guide , i will delve into the intricacies of trading gold, empowered with knowledge that will enhance trading strategies. From deciphering patterns to understanding correlations , i will unlock the secrets of the golden realm, equiped with the confidence to make informed decisions.
So fasten your seatbelts and get ready to navigate through the twists and turns of this enchanting market.
Range Trading - The Breakfast Feast
Picture yourself at a lavish breakfast buffet, where a wide array of options tempts your taste buds.
Similarly, range trading in the gold market offers a delectable spread of trading opportunities. By identifying key support and resistance levels , you can effectively navigate within a defined price range. Just as you would choose from a buffet, traders can enter buy positions near support and sell positions near resistance.
Deciphering Trends - The Path to Success
In the golden realm, trends serve as beacons of guidance for traders. Analyzing price movements over time helps uncover valuable insights into the direction of the market. By identifying uptrends, downtrends, or sideways trends , strategies can be aligned accordingly. Utilizing tools like moving averages and trend lines, may create a clearer picture of the market's path, allowing you to ride the waves of success.
Breakouts - Seizing the Golden Moments
Just as a phoenix rises from the ashes, breakouts in the gold market signify the birth of new opportunities. Breakouts occur when the price breaches a significant resistance or support level, often indicating a shift in market sentiment. Trades will be positioned to take advantage of these golden moments by entering in the direction of the breakout. However, it is crucial to denote confluences and employ proper risk management techniques or wait for confirmation before diving into the fray.
Correlations - Unveiling Hidden Connections
The gold market is not an isolated realm; it is intricately connected to other financial markets. Understanding correlations between gold and other assets can provide valuable insights. For instance, a negative correlation with the U.S. dollar may indicate that a weaker dollar could lead to increased gold prices. By monitoring these relationships and recognizing their impact, you can make more informed decisions and maximize profit potential.
Retesting - A Second Chance
In the golden realm, opportunities often come knocking twice. Retesting occurs when a price level that was previously broken acts as a new support or resistance. Traders can capitalize on retests by entering positions in the direction of the original breakout. This phenomenon can provide a second chance to those who missed the initial move or wish to reinforce their existing positions. By identifying and evaluating retesting scenarios, you will enhance your trading strategy and seize these hidden but well-known opportunities.
☆
As we conclude this journey through the golden realm, you could now posses a deeper understanding of the gold market's intricacies. By embracing range trading , deciphering trends , seizing breakout moments , unraveling correlations , and recognizing retesting opportunities , you can navigate this enchanting market with confidence. Armed with technical indicators, pattern analysis, and an awareness of session transitions, you will unlock the potential for profitable opportunities.
So, fellow aspiring traders, step into the foreign exchange golden realm armed with knowledge and embark on your path to success, b e ready to make informed decisions and claim your share of the golden treasures.
HappyTrading 🤠 J
USDMXN Setup for a Huge Bearish Breakdown with +40% DownsideThe USDMXN has Bearishly Broken Below a Demand Line and backtested it as resiatnce as well as losing the support of the 89 Month EMA; we will now be attempting to crack the BAMM Trigger Line at the level of B and if we break that a Minimum 786-886 retrace would be very likely
ONON - Still TrendingONON exhited strong price action since it's gap up after it's last earnings call on 21 Mar23 (pullbacks not withstanding). Volume continued to be good for the past 4 weeks with relative strength (relative to SPX) continuing to improve.
However one can consider to ride this stock managing with trailing stops (pivot lows, fib retracement levels, moving average etc) to see how far it can bring us.
Earnings is expected on 5 May, if it continues to run up till then, there is a possibility it could sell off after announcement (even on good news). Hence do be mindful of volality around then.
Bitcoin Price Prediction About Rising ChannelAs it is known from the upper band of the channel we are in, the 200-week simple moving average and even a solid horizontal resistance area, we were rejected with the contribution of the deathcross realization and the negative discrepancy in the relative strength index and price correlation on the daily timeframe.
The predicted decline and reaction rise areas do not seem to be very pending.
As I expected, the main decision area seems to be around $18,500.
Feel free to comment, knowledge multiplies by sharing.
Bearish Divergence on Daily BTC Chart and Channel ResistanceIf we look at the current situation, we are faced with an unexpected rise in the BTC table, considering both the USA inflation data, the global markets and the US Dollar Index .
We've come to the resistance zone of an already rising channel , as if that wasn't enough, there is a weekly period death cross presence. In addition, there was a serious negative mismatch between the price and the relative strength index in the daily timeframe .
Considering these data, it would not be surprising if the price tries the channel subband $18.5K from this point.
BTC on the Intersection of Many SupportsAlthough we seem to be among the rising channels in many analyzes, I would like to bring an alternative perspective to the situation.
Considering that we are in a falling channel structure divided into layers, we can see that BTC has been priced in a thin range that has served as a very critical region as both support and resistance areas in the recent past.
The top of this fine range can be thought of as a foam area. The real consolidation area is in the lower layer.
Currently, both the gold pocket zone as the fib level and a descending trend from the $69K level, both the 200-day simple moving average and this thin channel range I mentioned provide a support to the price.
Approaching a pivotal week for the S&PThe S&P500 / ES is sitting right at a critical point which I believe will break this week or next
The weekly chart shows that the S&P is now above most key moving averages, including the 200 moving average (displayed in black), the 20 moving average (displayed in white) and the 50 moving average (displayed in yellow). Also it has broken above the upper resistance trend line (displayed in red), these are all obviously very bullish but a few major headwinds remain that may upset this upwards momentum.
Price last week touched the 100 moving average (displayed in blue) but then rejected back down to end up finishing right at the Fib Extension 0.236 level. Ironically the 100 moving average has been a menacing level that has been difficult for the S&P to break through, 7 weeks ago and 21 weeks ago exactly the same touch and rejection of the 100ma occurred. Further to this we are about to enter one of the most bearish seasonal periods of the year for the S&P, I've included a seasonality indicator in my chart which shows 3 year, 6 year and 9 year tendencies and they all have exactly the same downwards pattern starting in February. The indicator below the Seasonality scan is RVI (relative volatility index), this is good for measuring both the volatility along with direction. Inline with what the market has been doing the past few years the RVI had been generally trending up and created a support line that was largely unbroken from end 2018 - Jan 2022, and since been broken the RVI is now showing a downwards trend and instead of a support line there is a resistance level over head that price is close to approaching.
The last indicator on the chart includes Larry Williams Vix_Fix which had turned red recently (2 bars/weeks), signalling we are in historically low volatility period in the VIX, most traders know that large moves often follow periods of very low and/or contracting volatility. This last indicator also includes a display for the bond yield curve and this is currently shown in the maroon/deep red which confirms a fairly long period inverted curve which is also known as a precursor sign of recession and market sell off.
The recent closed weekly candle was an indecision candle so this week that is coming or perhaps the one that follows should tell a lot about where the market will be heading over the course of the next few months
A bullish bias would mean
Price this coming week will disregard the seasonal bearish tendency and instead break above both the 100ma and the 0.236 Fib and close the week above these levels.
A bearish bias would mean
Price has closed back below the resistance level on the chart (both price resistance & RVI resistance) and price has tracked the normal declining seasonal pattern that plays out around this time of the year.
I see more chart evidence of a coming decline than an incline but in any case we still need to wait for direction confirmation which should look like one of the above scenarios. So it is time to pay very close attention to the charts and In the week that follows the market direction confirmation signal I suspect we will see some large and fast moves of either sideline money coming into the market to cause one last blow off top before some kind of recession sell off later in the year or heavy selling as these key levels get rejected and the seasonal sell of takes hold.
XAUUSD : GOLD 1 HR ORDER BLOCKOANDA:XAUUSD
Hi , Trader's we started buying Gold at 1810 , and until now we are in huge profit
Market created order block in 1 HR TF , Market can reach upto 200 ema point
1830 Area market will complete it 50% correction , and as per technical analysis 1830 Area will be death cross for Gold
So for Short term we will target 1830 area and afterwards will decide according to price action
❤️ Please, support my work with follow ,share and like, thank you! ❤️
BTC Fake BreakOUT and Price PredictionAs it is known from the upper band of the channel we are in, the 200-week simple moving average and even a solid horizontal resistance area , we were rejected with the contribution of the deathcross realization and the negative discrepancy in the relative strength index and price correlation on the daily timeframe .
The predicted decline and reaction rise areas do not seem to be very pending.
As I expected, the main decision area seems to be around $18,500.
Feel free to comment, knowledge multiplies by sharing.
AUD/USD 4HR CHANNEL DOWN PATTERN OANDA:AUDUSD
HI , TRADER'S .. MARKET IS IN DOWN CHANNEL OR DESCENDING CHANNEL
It's a bearish reversal pattern , After completing retest of down channel trendline , market can make a double bottom
Or any reversal candle like hammer or doji can be formed , buyer's can push market up from lower support .
Ideal to buy once market breakout of channel down
❤️Please, support my work with follow ,share and like, thank you!❤️
Bearish Divergence on Daily BTC Chart and SMA200/W ResistanceIf we look at the current situation, we are faced with an unexpected rise in the BTC table, considering both the USA inflation data, the global markets and the US Dollar Index.
We've come to the resistance zone of an already rising channel, as if that wasn't enough, there is a weekly period death cross presence. In addition, there was a serious negative mismatch between the price and the relative strength index in the daily timeframe.
Considering these data, it would not be surprising if the price tries the channel subband $18.5K from this point.
Pivotal week (or 2) ahead for the S&P The S&P500 / ES is sitting right at a critical point which I believe will break this week or next
The weekly chart shows that the S&P is now above most key moving averages, including the 200 moving average (displayed in black), the 20 moving average (displayed in white) and the 50 moving average (displayed in yellow). Also it has broken above the upper resistance trend line (displayed in red), these are all obviously very bullish but a few major headwinds remain that may upset this upwards momentum.
Price last week touched the 100 moving average (displayed in blue) but then rejected back down to end up finishing right at the Fib Extension 0.236 level. Ironically the 100 moving average has been a menacing level that has been difficult for the S&P to break through, 7 weeks ago and 21 weeks ago exactly the same touch and rejection of the 100ma occurred. Further to this we are about to enter one of the most bearish seasonal periods of the year for the S&P, I've included a seasonality indicator in my chart which shows 3 year, 6 year and 9 year tendencies and they all have exactly the same downwards pattern starting in February. The indicator below the Seasonality scan is RVI (relative volatility index), this is good for measuring both the volatility along with direction. Inline with what the market has been doing the past few years the RVI had been generally trending up and created a support line that was largely unbroken from end 2018 - Jan 2022, and since been broken the RVI is now showing a downwards trend and instead of a support line there is a resistance level over head that price is close to approaching.
The last indicator on the chart includes Larry Williams Vix_Fix which had turned red recently (2 bars/weeks), signalling we are in historically low volatility period in the VIX, most traders know that large moves often follow periods of very low and/or contracting volatility. This last indicator also includes a display for the bond yield curve and this is currently shown in the maroon/deep red which confirms a fairly long period inverted curve which is also known as a precursor sign of recession and market sell off.
The recent closed weekly candle was an indecision candle so this week that is coming or perhaps the one that follows should tell a lot about where the market will be heading over the course of the next few months
A bullish bias would mean
Price this coming week will disregard the seasonal bearish tendency and instead break above both the 100ma and the 0.236 Fib and close the week above these levels.
A bearish bias would mean
Price has closed back below the resistance level on the chart (both price resistance & RVI resistance) and price has tracked the normal declining seasonal pattern that plays out around this time of the year.
I see more chart evidence of a coming decline than an incline but in any case we still need to wait for direction confirmation which should look like one of the above scenarios. So it is time to pay very close attention to the charts and In the week that follows the market direction confirmation signal I suspect we will see some large and fast moves of either sideline money coming into the market to cause one last blow off top before some kind of recession sell off later in the year or heavy selling as these key levels get rejected and the seasonal sell of takes hold.
Consider the Long-Term ChartI'm not going to call if the bottom is in or "not so fast" but just want to point out that we may only be halfway through a significant long-term downturn. It's concerning to me that RSI has broken significantly below 50 for the first time since the market recovered from the lows in early 2009. It's also concerning that price looks like it wants to retest the 50-mo. EMA after seemingly finding support a couple months ago. There's still considerable downside risk to the 200-mo. EMA where it has found long-term support in the past and it also happens to currently line up with a double bottom with the covid panic low from early 2020. Will it go down to the 200-mo EMA now? I'm not sure, I'm just saying that it could and you need to be prepared for that. I do know that if it continues to drop it would be a blood bath down at those levels and also a great long-term buying opportunity in my opinion (it could find support above, at or below the 200-mo EMA and an interesting level would be the top from the tech bubble around 2000 which lines up with a period of sideways consolidation from 2015-2016.
GBPAUD - short opportunityHi everyone and Happy Friday! The GBPAUD is trending towards the downside on the main higher time frames. The weekly chart is attempting to develop a bearish engulfing candlestick pattern and is aiming to break below the 20 and 50 moving averages. This bearish scenario is also visible on the daily chart. The 4-hour chart is providing further confirmation of a entry point with a bearish engulfing candlestick closure and a new 4-hour low, indicating incoming bearish pressure. However, it's important to have in mind that a pullback towards the moving averages may occur before the continuation of the downward trend. Overall, the analysis suggests that the GBP may be weaker compared to the AUD.
USOIL Continues To Struggle at the Bearish Butterfly HOP LevelLast week i entered a trade at the PCZ of the Bearish Butterfly and it went a bit higher but found resistance at the HOP Level after diverging on the RSI and is coming back below the 800EMA so i have held and added to my entry and am still targeting the full ABCD Breakdown Movement down to $70 or lower.
VALID CHART UNTIL 2024 HALVING AND U.S.ELECTION for #LUKSOVALID CHART UNTIL 2024 HALVING AND U.S.ELECTION for #LUKSO
Don't mind this, this is just for research. Using Fibs and tripleMA alone trying to determine price action and price bottom and tops.
SPX - Buy the dips?SPX is approaching a critical resistance @4100 (long term trendline / 200 day moving average) and a near term pullback is certainly possible from here.
However, looking at the bigger picture, any pullback this month could be an opportunity to long some stocks with the right technicals.
Yes, Fed is pivoting. However, interest rate could stay high for some time, the yield curve is inverted and the economy could be dipping into recession etc., etc., could we be in a major bull trap or could the market have already factored in these scenarios?
On the technical front, I am seeing more and more stocks that appear to be bottoming or have bottomed. The market could remain volatile for a while more but it is probably time to look for opportunities.
I will remain cautiously bullish as long as any dips in the near term do not go below 3900 (50% fib retracement of the recent AB upswing on daily chart).
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
Knowing if a trend is still valid or is beginning to failin the above image you can see, that when all moving averages do not cross or overlap one another, this indicates a strong trend/price sentiment in this direction, even after a major pullback, you'll notice the moving averages still dont cross or overlap.
also on the chart image ive touched upon the very popular 1, 2, 3 trading pattern and highlighted that there's a not so obvious 4 reset wave before the 1, 2, 3 pattern starts again, the trick is check to see if the phase 4 wave causes any of the moving averages to cross/overlap before setting up your 1, 2, 3 move! because if they have crossed or one of them is overlapping the other, this signals the trend is weakening and the market may be looking at beginning a range or and new trend in the opposite direction.
EURUSD DailyCan I just say WOW at the rejection at the 200MA ?!? Honestly this is playing out how I would like to see the market.
I recognize a price action candle, the shooting star. The shooting star often occurs when the market is buying and begins to react at some level of resistance. I am identifying my level of resistance as the 200MA.
I would like to see todays candle (11/16) to close as an engulfed candle. ONLY IF todays candle close with momentum, the market is likely to continue to sell…
But as of right now, I am going to sit on my hands and continue to watch the market form.