Forex Trading 2018- TA/FA- Setups and discussion

Originally posted by Martin Gifford ↑

"What’s your call tonight, not that I will hold you too it."

Too much can happen between now and then so can't make a call now. But it only managed a 50% retrace before sharply falling again. That looks like panic and weakness to me. It would have needed to retrace back up over 60% and settle around 50% for there to be a sign of strength. So I'm expecting further falls in the next few days, which would be surprising given that it has fallen so far already. S/R lines in the last few days are around 23,250 and 23,650, so a big bounce around there could be a W bottom.

But I'm looking for a big bounce if it falls even lower, because that will be epic and easy. Currently, it is sitting well below the 4hr EMA's, and the little H&S is complete, so it could be in intra-day bounce territory. If it comes back to the EMA's, then I'll see what it does there and check the hourly. Ambiguous intra-day territory at the moment.

The thing is that volatility is so high recently, that you can wait for a solid fall, then just buy when a candle closes above the EMAs on the 5 minute chart, then use a trailing stop just below the EMAs, and vice versa for steep rises. Works better on DAX because it usually runs smoother. You lose a few, but when you catch one it's big - see example chart below (450 points). Of course, you could get unlucky and enter just as it starts slowing down or entering a whipsawing period. That's why it's best to wait for signs of capitulation or exhaustion (big climax candles) or support or resistance (multiple wicks/tails on smaller timeframes). That's what happened on the DAX chart below - fall accelerated, indicating capitulation, followed by a fast big bounce.

"Since you are here, what time frame to you find best for trading DJIA"

I usually trade 5 or 15 minute during the day, then 1 minute at night if I'm up that late, but in these conditions, I stay in 5 minute after checking the bigger timeframes, and use smaller bets with wider stops.

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"S/R lines in the last few days are around 23,250 and 23,650, so a big bounce around there could be a W bottom. But I'm looking for a big bounce if it falls even lower, because that will be epic and easy. Currently, it is sitting well below the 4hr EMA's, and the little H&S is complete, so it could be in intra-day bounce territory. If it comes back to the EMA's, then I'll see what it does there and check the hourly. Ambiguous intra-day territory at the moment."

DJIA 4 hr chart. Bounced in Support area and stopped at EMA's. Key area now. A solid break above EMA's would suggest a kind of W bottom is in and go long. If 24,400 resistance holds, then expect bigger falls and go short. Last two candles alone, look good for long.