Tuesday 16th of August

Good morning folks!

I hope everyone is well!

I’m coming to you today with a question (especially if you trade in a very similar manner to me)

If you execute a trade on the 4hour -based on the pattern / candle shape and previous candles on the 4hour (I have a script that does that analysis for me)- do you look at the last 1hour close?

I’m thinking of digging into these since I believe it could have some potential to keep me out of losing trades or even reduce my SL / increase my average RR

Really keen to know more about your POV

Here’s an example of what I am talking:

Check on the 1hour if the last candle making up the 4hour candle is bearish

–> In this case it was

Execute a trade using 1.5 candle high for stop (of 1hour) – target 3:1 of 4 hour candle as usual

That makes a 23R trade

Now sure it’s very rare for the last candle to be so small, so this one is an outlier, but I’m only picking it as an example – in any case, the average RR is going to be superior to 3 by quite a lot, the question is – is it going to strongly negatively impact my strike rate?

From there we have another question, if the last 1hour candle is going “against” the direction we want – should we stay out?

If so, should we execute an order entry at the low?

If the next 1hour close is also going against us, what should we do?

Does that make sense to you?

Anyway


Trade Update

CHF/JPY

I have executed a short on CHF/JPY

Why?

  • We’ve reached a fresh daily area of supply, expecting price to head lower
  • We then formed more or less a double top before heading back lower
  • We are now in the 5th market day of this bearish bias (so I’m still willing to execute)
  • We’ve clearly broken the 50EMA – which has been respected quite well in the recent past
  • We opened below the daily pivot
  • We’re retesting the 50EMA and pivot at the same time

I mean if that isn’t spoonfeeding my strategy I don’t know what else to say

I know some traders like to wait to see a break of the 5min 50EMA before executing these types of trades, however the 5min chart doesn’t give me access to enough data to be able to confirm (or not) if that is worth – it’s something I am tracking moving forward


Watchlist

NZD/JPY

I have an order in the market so not going to be sharing the LTF to avoid being used as a signal indicator but here’s the chart

Let’s be honest, it does resemble A LOT what I just talked about on CHF/JPY no?

We see a clear rejection of a daily supply level, currently forming a nice sideways correction on the hourly chart as well

Let’s see what happens here!

Those are the only two I have on watch for today, so on that note, I’ll have to say, take care folks! I hope to see you tomorrow and tell you about 2 winning trades 😉

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