October 8, 2015Daily Analysis

10/8 Analysis: Perfect Entry Pattern

Perfect Entry Pattern

Just 20 seconds into the London session, a perfect text book pattern emerges as the CHF (turquoise line) is strong with a very steep line to the far right indicating huge upside momentum going on right now.

On the weak side, we have the AUD (orange line) with a steep line to the far right heading down also indicating current momentum.

  • AUD/CHF SELL

Worst case scenario, if you would have entered at the bottom of the opening price bar the pair still moved 25 pips down so you would have easily hit your breakout profit of 20 pips.

When you watch the entire video analysis below, I’ll show you another perfect entry pattern from the London session:

[00:00 – 05:46]

[slide]              [yellow high turning down, green / orange weak turning up]

                        Hello, I’m James Edward from CompleteCurrencyTrader.com, here with another  Currency Strength Analysis training video. And, today, I have another example for you of the perfect textbook example of an entry pattern and an entry signal for a break-out strategy. So this is what the indicator looked like earlier at the London Market Open.

And, you can see, if you do your initial analysis, that the (blue) Swiss Franc (CHF)–this [points] turquoise line–is looking very favorable to the strong side, so it is a strong currency which is continuing to get stronger, but, crucially, it is moving very, very steeply over here [points] on the right-hand side of the indicator. So right from when the Market opens, that should be on your radar, watching that, anticipating and expecting to place a buy on the (blue) Swiss Franc (CHF).

Unfortunately, to the weak side, we don’t have anything that is moving away in the opposite direction. The obvious currency is the (orange) Australian Dollar (AUD) here. [points] That has moved down steeply to weakness just before London Market opened, but, at right now, at the Open, actually turning back up.

So, I wouldn’t advise you enter any trades right now at the Open. However, you don’t need to wait very long. Remember, I do say that you should give it a little bit of time for the–

[slide]              [2nd view: 20 sec in, blue up, orange down, rest hover abt centrally]

(continues)… Market to develop. Well, today, you wouldn’t be waiting any more than 20 seconds. (This is [points] 20 seconds after the Open.) You can now see the (blue) Swiss Franc (CHF) is even better, in terms of the steepness and the size of that move going up to strength. And, now, the (orange) Australian Dollar (AUD) is moving back down to weakness and it’s moving very steeply.

So you have an excellent indicator here showing you momentum between two currencies which means if you paired them together into an AUD:Swiss Franc pair, you have an excellent opportunity for a break-out entry.

And, if I go over to that–

[slide]             [B&W vertical line AUDCHF.MS]

(continues)… chart now: this is the AUD:Swiss Franc on the five-minute price bars and this is the London Market [points 5th bar of decline at ctr] Open at this level here. [2:13] And you can see from [creates cross pt same bar] the Open, the price is actually [diagonal line 5th bar down to bttm lowest bar just right of ctr] pushed down in one direction over 30 pips.

You would’ve seen this pattern develop–

[slide]              [previous 2nd view: 20 sec in, blue up, orange down, rest hover abt centrally]

(continues)… on the indicator at just 20 seconds after the Open. So, within 20–

[slide]             [previous B&W vertical line AUDCHF.MS]

(continues)… seconds the price was already moving down here. And let’s go on a worst-case scenario. Remember, these are five-minute price bars. Let’s say that you’d entered at the absolute lowest point here. [creates new cross pt bttm same bar, diag down to same bttm lowest bar] Even then, the price has still gone down 25 pips, so you would’ve, very easily, taken your 20-pip profit target and got[ten] away from  the break-out trade right from the Open.

[slide]              [previous 2nd view: 20 sec in, blue up, orange down, rest hover abt centrally]

(continues)… Now, if I go back over to the dashboard, actually, there was another opportunity, which I will show you because, again, it emphasizes the importance of momentum and steepness in the lines.

[slide]              [3rd view: 15 min rt, blue strong, pink up / orange dives, red down]

If I push the indicator forward, this is at the 15-minute point. So this is 15 minutes  after London has opened and you can see that the (blue) Swiss Franc (CHF) has obviously continued up (because that was your first break-out trade), but you now have the (pink) Euro (EUR) which is also the strong currency, which is continuing to strengthen and is now, crucially, moving very, very steeply up to strength.

You have a couple of currencies moving down to weakness: the (orange) Australian Dollar (AUD) which you’d already be in with that break-out trade, but you can also see, down here [points purple] the (purple) U. S. Dollar (USD). So the U. S. Dollar (USD) over the last 60 minutes has been a weak currency, which is continuing to get weaker and is now moving very steeply.

This should catch your attention. It may not be an immediate entry right now. Remember this is exactly 15 minutes after the Open. But, if I push it forward just another two or three minutes,–

[slide]              [4th view: 17-18 min, mirror image blue high, pink up / purple weak]

(continues) … this is how that pattern developed. And, hopefully, you’ll now see that that is the perfect textbook example. [points weak side] You have that cone-shaped diversion between two currencies which are separating in opposite directions very, very quickly; acting as a mirror image to one another. And, there should be no doubt in your mind that that is a trade entry.

So, if I go–

[slide]              [B&W vertical line AUDCHF.MS]

(continues)… over to that chart, now, and I’ll bring in the (pink) Euro (EUR): (purple) U. S. Dollar (USD)–

[slide]              [B&W vertical line EURUSD.MS]

(continues) … on the five-minute price bars. This is the area [points ctr long bar] that we’re looking at. I put a red line on here [just below horiz ctr] just to show you that end of the 15-minute price bar.

So, if we go back over to the–

[slide]              [previous 4th view: 17-18 min, mirror image blue high, pink up / purple weak]

(continues)… indicator, I’ll show you this pattern (here) [points pink] was at the 15-minute point between the (pink) Euro (EUR) and the (purple) U. S. Dollar (USD). This is when it would’ve first caught your attention and–

[slide]              [previous B&W vertical line EURUSD.MS]

(continues) … that is coinciding with this red line [points] here. Actually, this is the close of that 15-minute price bar. And, then, over–

[slide]              [previous 4th view: 17-18 min, mirror image blue high, pink up / purple weak]

(continues) … the next two to three minutes, that pattern developed into what we’re looking at (here) which–

[slide]              [previous B&W vertical line EURUSD.MS]

(continues) … is the continuation of this [same long bar, ctr] move.

In real terms, you could’ve gotten in anywhere from this red long onward and you can see [diag line up to top 2 bars rt] the price has gone up 35 pips from the earliest opportunity.

You would’ve probably entered somewhere around about here [points in circle of upper third long bar] but, even then, looking at it all the way up to right about this area (here) [creates cross pt same bar, bttm top 1/3] and still have got[ten] away [diag line up to top 2nd bar rt] with your 20 pips and walked away with a profit.

And that is the power of momentum.

[slide]              [previous 4th view: 17-18 min, mirror image blue high, pink up / purple weak]

When you have a move with a burst of momentum in the Market like you’re looking at (here) [points purple] which is what these patterns are for, the second trade that’s come between 15 and 17 minutes after the Open, or–

[slide]              [previous 2nd view: 20 sec in, blue up, orange down, rest hover abt centrally]

(continues)… even this trade (here), just 20 seconds after the Open. It is these steep lines that you are really looking for. [draws pointer down betw both high blue / low orange] These are the ideal, textbook examples of trade entries and–

[slide]              [previous 4th view: 17-18 min, mirror image blue high, pink up / purple weak]

(continues)… when you see those opportunities, you shouldn’t hesitate because it is that momentum which is going to–

[slide]              [previous B&W vertical line EURUSD.MS]

(continues)… carry that trade very rapidly into profit [points 2nd bar rt of long] and give you that 20-pip break out that you are looking for.

 

 

[end]

 

(5:46)

You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.

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James Edward
James Edward has been a successful Forex hedge fund manager & educator for over a decade. He founded Complete Currency Trader, a London based firm that has consistently trained individuals to become professional and profitable traders long term using the individual currency strength analysis methodology. CCT is an elite Forex educational firm and has a reputation second to none with over 90 positive reviews and an overall 4.538 out of 5 rating on the third party verification site Forex Peace Army. James’s affable personality, expert knowledge, notoriety for getting results, and steadfast dedication to his clients, has secured his position as one of the most trustworthy, liked, and in demand authorities in the industry.