Hey Guys, I wanted to get the feedback of fellow traders new and experienced on the way they take reversals and continuation in confluence zones in trending markets between 5m-4 hour charts. In the spot fx market. I understand that continuations make up 65-70% of developed market patterns and reversals make up 30-35%. To my understanding for price action to make a continuation it usually stabs through the Support/Resistance zone or a momentum candle then pullbacks, which may been seen in lower timeframes for it to hold to make a continuation. Reversals usually make a pin bar reversal signal at a major structure level or between 38.2 - 78.6% fib level at times a double pin bar. I also seen at times price hugging the S&R lines especially in the Asian session coming into Europe for price to pullback and breakout only for it to fake out and then breakdown or a true breakout after a false breakout. Also, price tends to have a control point at 00 numbers with it either poking through and reversing or blasting through and continuing. What's your experience been like? Please stick to the topic.
The market will show you all kinds of PA to throw you off. I just keep it simple, if it breaks the confluence zone, then it will move in that direction. If it doesn't break the confluence zone, then I don't trade it. I'm always looking for continuation. Stop and reverse on the other side of the zone. I always expect to get whipsawed and faked out of 3-4 positions in a row before price finally breaks into a direction that is sustainable. Sometimes you eat top ramen, other times, you eat a nice chicken dinner. The market dictates what that is.
Do I identify areas of support and resistance, however, use a little twist. Instead of anticipating that they will hold, sit tight and wait. Look to see if they break, once they do, trade the back-test, fairly small risk and usually great fast reward. Watch the very first test, it likes to fake, second mouse gets the cheese unharmed. Do not be the herd.