Today's 3-wave and range trading verification | USD/JPY and EUR/GBP total +63.5 pips
In FX trading, the indispensable elements for consistently generating profits are understanding the "three-wave movement" and a clear range of price movement.
This time, we review the USD/JPY and EUR/GBP trades on September 8, 2022.
The results this time are,+48.8 pips on USD/JPY and +14.7 pips on EUR/GBP.
Total gain of +63.5 pips.
Using actual chart images, we will examine the entry reasons in detail.
EUR/GBP: Capturing value from a pennant breakout
First, the analysis of EUR/GBP on the 15-minute and 1-hour charts.
【1-Hour Chart】Higher-timeframe environment awareness
On the 1-hour chart, the price was in an uptrend making new highs.
The moving averages (MAs) were aligned well, with battles around the highs, but the upward bias was strong.
【15-Minute Chart】Three-point confirmation of the pennant
On the 15-minute chart, a "pennant" was forming as indicated by the green line.
As shared within the community, pennants are patterns that can often be false signals.
However, since we confirmed the "three contact points" and the MA shape was favorable, we aimed for a breakout.
【Trading Result】+14.7 pips
Entered on the retest after the pennant breakout (at L) and captured the full move for a gain of +14.7 pips.
USD/JPY: Targeted three-wave move yields +48.8 pips
Next is the USD/JPY trade, which yielded significant profit.
【1-Hour Chart】Capturing a trend reversal
On the 1-hour chart, the previous uptrend stopped, and the price broke below the orange 20 MA.
This is a crucial moment to see whether a corrective down-move (the third wave) will begin.
【15-Minute Chart】Starting point of the third wave and green line攻略
- Break slightly below the minor trough of move ① and then sell on the rally
- Break below the green wave trough ② and then sell on the rally
- Enter short at the moment the green rising line is broken (point S).
・The blue high has been established and the blue low is being sought
・The yellow wave is also established at a high and is moving lower to find a low
・The green wave is likewise forming a new low
Enter during the phase where the three waves are seeking a low
The target price move was captured precisely.
+48.8 pipsbecame a substantial gain.
Summary: Key points from this trade validation
The elements common to both currency pairs are as follows.
- Be mindful of the direction of the 1-hour MA and divergence
- On the 15-minute chart, thoroughly verify the "three-point" lines
- Enter after the three-wave pattern has formed
In FX, the decisive factor is whether you can patiently wait for such favorable patterns.
Everyone, please try validating this pattern on your own charts as well.
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