I am a new trader who has only been trading for around 4 or 5 months and studying for just over a year. I have a great interest in volume and volume price action. I will be using this blog to note down trade ideas and hopefully improve my own trading and skills as i progress. I will be trading on the 4 hour timeframe upwards and on the odd occasion using the 1 hr timeframe (usually for entry).
Objectives – To hold trades based on the Monthly and Weekly charts. As successful trades progress, add to positions on each break of Support/Resistance and retest.
I will attempt to use volume price analysis to help with my trading decisions and use this more as my skills enhance.
This entry is to establish long term Biases which I will update Weekly identifying(or attempting to) stopping volume, Buying and Selling Climaxes, Accumulation and Distribution etc.
Price pattern recognition
Use Pivots to define congestion areas.
Falling and Rising triangles
Triple tops and triple bottoms
Price Action with confirming volume at support and resistance.
Doji, Tweezer top, Shooting star, Hammer,
Breakouts from congestion zones.
Volume and its relationship to each candle(confirmation or anomoly). volume and candles relationship to other candles around them(increase/decrease).
This is just notes to give a rough idea of what my strategy entails.
Long Term Trade Ideas
AUD/USD Monthly chart
The AUD USD monthly chart has fallen sharply over the last 3 months with each bar being larger than the last. Volume has above average and there has been little resistance to the last three monthly bars.
The pair is currently at 0.78605 and there is a fairly strong/key line of support at around 0.7800. This held as resistance in February 2004 and again in February and March 2005. It was used as support in August 2007 to send the pair shooting higher and again in July 2009.
Price currently sits very close to this point. However, at each point in the past a reversal has occurred when price has approached this area with caution. As we can see on the chart, Big monthly bars approached this level from the upside in August 2008 and again in May 2009 and both times the key level was broken.
Looking at our last 3 monthly candles they are long with fairly small tails, signalling little fight. They are increasing in size, albeit only marginally each time. We have no signs of stopping volume.
Risk on trade. I think this trade offers a medium risk and this is due to the major area of support approaching. If this key area is easily surpassed it would then be downgraded to a low risk trade. I will be looking to trade on a pullback to 0.8500 with a stop around 0.83226 and two targets, one at the key area of 0.7719 to take some profit and should that be hit my stop will be moved to break even on trade 2 with a long term target of 0.71.
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