Possible Buy and Possible Sell Scenario

2020년 10월 10일

Trend/Market Structure

Monthly and weekly price action appears to be in a downward trend, as evidenced by a sequence of lower lows and lower highs that appear to respect the support and resistance areas of the descending channel. However, on the H4 timeframe, price appears to be in an upward trend because we can see a sequence of higher highs and higher lows respecting the support and resistance levels of a rising wedge pattern and.

Area of Value

Ideally, price could continue in a downward direction until it meets the support area identified in the rising wedge. We should then expect the price to reverse upward towards the resistance level established at a previous market structure. If price follows this direction, market pattern theory argues that price could explode downward, continuing its long term direction to the downside.

Entry Trigger

Once the price has reached each level, we want to see strong rejection followed by a large move in the opposite direction. I will be monitoring price once it moves closer to these areas, and scale down to the 15-minute timeframe to find entry triggers with suitable risk to reward ratio.

Fundamentals

Keep in mind that high impact reports such as the U.S Jobless claims and CPI for food and energy are due for release on Thursday and Friday, so factor this into your trading decisions.