Take a,look at the euro/USD over the past weeks and days. Strong downtrend, strong reversal, retracement, sideways consolidation. The trade should resume to the upside here but its going, against a bigger timeframe in the opposite direction. So I would trade it more cautiously. Smaller. And expect some weird price action as you have nervous traders on both sides of the market
That's very interesting. I believe Marty Schwartz talked about a similar idea. Not only does he want technicals working for him but he wants the market trend to agree. Your thought basically supplements that--not only should the trend agree, it should agree on as many time frames as possible. I'm going to incorporate this right from the start on sim trading to get used to seeing multiple time frames. I think 2 or 3 times frames would be a good start as to not get overwhelmed? So maybe daily, hourly, and 15 min or something. Quick question if you don't mind, Cswim. Being a newbie i have a lot of these hahah. Why is there less opportunity, and what do you mean "everything has already moved" ? Also, recognizing trends....I am assuming that you guys mean being able to draw the channel lines or support and resistance lines and then judging off of the slope of that, up, down, or side, on the trend? Sorry if I am asking annoying or stupid questions ops:
It's not stupid. If anything courageous cause there's so few that will ask about what they don't know. Myself included. OK, if the daily, hourly, and say 15_ min are pointing, basically up, it means that the price of the instrument you're watching has risen over a number of days, with fits and starts over that period where it wasn't clear which way the price would go. But it kept rising or falling after all. Now everything is up or sideways. The longer time frames are up, the shorter are up or sideways--its hard to tell. Now the price breaks out above resistance--a well defined and tested area. Generally it will go (up) then come down and retest that area. So its best to wait as the shorter term time frame corrects instead of chasing it. Those are some of the nicest trades. Take a look at USD/Cad over the last two weeks and see the breakout above 1.34. OK try to digest that
Yes after trading eminis and stocks, Spy. I tend to look at the bigger picture. Not really into the inside game on stocks. I've traded individual stocks but I look at them as proxy's for the market as a whole. BTW I didn't answer your question about trendlines. Later.
Take a look at euro as it approaches old high made earlier today. I have no idea what it will do. It should bounce to the downside at least temporarily off the resistance.
currently looking at USD/CAD like you said earlier...the 1.34 breakout. i see the 1.34 breakout at 12/07 and the resistance line starting 12/02 on daily chart. im going to screenshot it, you mind telling me if this is accurate? This is one of the first charts I've ever looked at on my own...is this correctly finding the support and resistance line? I am going to go into shorter time frame closer to the breakout now and see how the market was acting.. seems like daily/weekly it was moving pretty flat/sideways....i am assuming that shorter timeframe it was too...but let's see
yes I would pick that high as the reference. There's an ascending triangle after that--higher lows against a flat top. That's what attracted me. USD/Cad can be very choppy. So the long trade is still in effect but expect chop. There's not a lot more going on here--it should stay in an uptrend with shallow pullbacks.
yes 1.34_area should be support. Key word area. Just have to let market do its thing. I would stay long, add on dips and maybe sell a little on strength. BTW this trade very correlated to price of oil(inversely)