The week EMA sits above, and I think that’s an initial target, but after that, we could even be looking at the level. Nonetheless, keep in mind that the Australian dollar is extraordinarily choppy at the moment, and of course, is heavily influenced by a lot of external factors, not the least of which, of course, is going to be China. The Chinese economy seems to be slipping a bit, and that does not help Australia, to say the least.
It is a risk on, risk off type of currency pair that we are looking at, with the US dollar, of course, being the ultimate safety currency. If we were to break down below the bottom of the candlestick for the week, that could open up a move down to the level. But right now, I think it’s very likely that we will see some type of short-term bounce that traders will be willing to take advantage of. In fact, we could go all the way to the level and not necessarily change anything.
For a look at all of today’s economic events, check out our economic calendar.
Talking Points
GBP/USD Technical Strategy: Pending Long
Hammer formation helped signal bounce
Daily close above resistance to open further gains
GBP/USD continues its ascent following the Hammer formation on the daily which suggested a shift in sentiment for the pair near While there are some signs of hesitation amongst traders at the psychologically-significant handle, a bearish reversal signal is yet to emerge. A daily close above would suggest the bulls remain in control of prices, and would open up a re-test of the high near
GBP/USD: Close Above To Open Advance On High
Daily Chart - Created Using FXCM Marketscope
Examining intraday price action; the Harami near has failed to find much follow-through. With prices probing above a bearish candlestick pattern is notably absent. This suggests gains may be set to continue over the session ahead.
GBP/USD: Harami Finds Little Follow-Through As Prices Probe Above
4 Hour Chart - Created Using FXCM Marketscope
By David de Ferranti, Market Analyst, DailyFX
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.
original source
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
If we were to break down below the bottom of the candlestick for the week, that would obviously be negative, and it could open up a move down to the level, an area that I think is pretty significant when it comes to support. In general, we are basically in the middle of what could be the yearly range between and We could even go as high as this year, but anything above there I think would be a bit of a stretch as we have a lot of concerns globally.
So therefore, the demand for dollars will continue. And of course, both central banks are very likely to end up being loose this year. And if that’s going to be the case, nobody’s really going to win with the exception of maybe the dollar if there’s some type of serious economic issue. Remember Germany is now in a recession and that of course will make the ECB act to loosen monetary policy much sooner than people had anticipated. In the next couple of weeks though, it looks like we may try to bounce a little bit.
For a look at all of today’s economic events, check out our economic calendar.
According to most textbooks:
Whenever you spot a Hammer candlestick pattern, you should go long because the market is about to reverse higher.
And that’s what you do.
But the next thing you know…
The price immediately reverses and you get stopped out for a loss.
And you wonder to yourself:
“Wait a minute, isn’t a Hammer candlestick a bullish signal?
“Why did the market reverse against me?”
I thought I know how to trade hammer candlestick!
“What’s going on?”
Well, let me tell you a secret…
A Hammer candlestick pattern doesn’t mean jackshit (and I’ll explain why later).
But first, let’s understand what a Hammer candlestick pattern is about…
A Hammer is a (1- candle) bullish reversal pattern that forms after a decline in price.
Here’s how to recognize it:
And this is what a Hammer means…
In short, a hammer is a bullish candlestick reversal candlestick pattern that shows rejection of lower prices.
Now, this is important.
Just because you see a bullish Hammer candlestick doesn’t mean you go long immediately.
Here’s why…
Are you ready?
Here you go…
Let me explain…
Recall:
I said the Hammer candlestick pattern doesn’t mean jackshit.
And here’s why…
The Hammer is usually a retracement against the trend (on the lower timeframe).
Here’s what I mean…
This means if you randomly spot a Hammer and go long, you’re likely trading against the trend.
It’s no wonder you get stopped out and lose money consistently.
Now…
A big mistake traders make is thinking the trend will reverse when a Hammer is formed.
Wrong!
Here’s why…
A trend is made up of a series of candles (possibly or more).
Now let me ask you…
What are the odds of the trend reversing because of one candlestick pattern?
Slim.
So, if you want to know the direction of the trend, ask yourself…
“Is the price moving higher or lower?”
Don’t look at an individual candlestick pattern to tell you the direction of the trend.
Now you’re probably wondering:
“What is the context of the market?”
It refers to the market condition like whether the market is in an uptrend, downtrend, sideways, has strong momentum, etc.
And this matters, a lot.
For example:
If the market is in an uptrend, it’s likely the price will move higher (regardless of whether there’s a Hammer, or not).
Likewise, a Hammer can appear in a downtrend, but the price is likely to move lower since the market is in a downtrend.
Now…
You’ve learned the truth about the Hammer candlestick that most traders never find out.
And you’re probably wondering:
“So how do I trade the Hammer candlestick pattern?”
Well, that’s what you’ll discover next.
Read on…
Here’s the deal:
You don’t want to trade any candlestick pattern in isolation.
Instead, you want to trade it within the context of the market (as mentioned earlier).
So the question is… how to trade hammer candlestick?
Well, here’s a simple formula that works.
I call it the T.A.E Formula.
Here’s how it works…
Trend – Trade in the direction of the trend
Area of value – Trade from an area of value
Entry trigger – Identify an entry trigger
Let me explain…
If you trade in the direction of the trend, you increase the odds of your trade working out.
You might be thinking:
“How do I define the trend?”
Well, you can use a Moving Average Indicator to help you.
Here’s how…
Next…
AOV is an area on your chart where buying/selling pressure is lurking around (E.g. Support & Resistance, Trendline, Channel, etc.).
The key thing is to enter your trades close to an AOV.
Here’s why…
Next…
The purpose of an entry trigger is to identify a repeatable pattern that gets you into a trade.
So, once the conditions of your trading setup are met, you’ll look for an entry trigger to enter a trade.
It can be a Hammer candlestick or any other bullish reversal candlestick patterns.
Now, this is important…
You don’t want to trade entry triggers in isolation.
It’s only AFTER the conditions of your trading setup are met, then you look for an entry trigger.
Does it make sense?
Great!
Now let’s look at a few examples to see the T.A.E Formula in action…
T.A.E. winning trade on EUR/CHF:
T.A.E. winning trade on USD/ZAR:
T.A.E. losing trade on EUR/JPY:
And those are the meat of the hammer trading strategy.
Here’s the deal:
The Hammer candlestick pattern is a powerful entry trigger.
And if you were to trade it, your stop loss is at least the range of the Hammer (or more).
But won’t it be great if you can reduce the size of your stop loss and improve your risk to reward?
This means if your original Hammer trade has a risk reward ratio, then after applying this technique, you’ll have a risk reward ratio (or more).
Sounds awesome?
The let me introduce to you the Break of Structure technique.
Here’s how it works…
Here’s what I mean…
T.A.E. Set-up on XAU/USD:
T.A.E. Set-up on HO1! (Heating Oil):
This is powerful stuff, right?
Once you’ve mastered this technique, you can consistently find insanely profitable trading opportunities (that most traders never find out).
So in this hammer trading strategy guide, you’ve learned:
Now here’s what I’d like to know…
How do you trade the Hammer candlestick pattern?
Leave a comment below and share your thoughts with me.
Your Forex broker is on your side right? Good. He would give you so many free courses, indicators and sign-up bonuses – Surely he wants you to win? Time to think straight and do the math. 95% of Forex traders are losers. 5% winners. % of both old and new Brokers make tons of Cash. Winners. This is a public secret. Do you think your broker has built his business on the minority 5% who win, or the much, much larger 95% who lose? Think straight.
This e-book aims at unveiling the truth about FOREX trading. In the first section, I am
going to outline what we are told through various platforms about FOREX trading. Most
traders learn through internet. This is why the information about trading is similar in most
cases. In the second section I am going to elucidate on how losers lose. The last section
is the center of this book,will demystify the mystery. It explains on how winners win.
Whatever reason you are trading for, FOREX trading remains a mystery to 95% of old and
new traders. Only 5% winners understand how the 1% controllers play the game. This
world is a money game. Where is the money? Lol in this game of FOREX the money is on
the lions tail. Only the brave and the bold can take it. You can take it with bare hands. Not
by indicators. Lets see how.
аналитика форекс gbp кaртa мирa форекс вспомогательные индикаторы форекс как платят налоги трейдеры валютного рынка форекс лучшие индикаторы для входа индикаторы измерения температуры щитовые дмитрий котенко форекс клипaрт для форекс имхо на форексе дц форекс брокер отзывы безрисковая комбинация форекс индикаторы рынка ферросплавов