Oil Weekly trading Setup 29-08-2021

 The Current Big Trend of Oil is Up, the weekly chart below using a setup of Sywa Channel Trade Strategy shows a Buying Opportunity

Oil Weekly Chart

 

The Daily Chart also showing a potential of upward movement, if the movement persist and Breakthrough the EMA 55 (purple lines), the next Resistance will be the last fractal lines. 

Oil Daily Chart

 

   Recent Storm on the Mexican gulf and USA also becoming the supporting fundamental for Bullish Oil. Here is the piece of the article Oil Up, Producers Brace for Potential Gulf of Mexico Hurricane

 

In Summary :

Trading Position: Bullish

Trading Target : 72.00

 

 

 

 

Why Drawing Support and Resistance Lines Essential !

 

   The most basic skills for every trader is to able to Draw Support and Resistance Correctly, it is so basic that it should be the first skill to master before one even learn other Technical Analysis skill.

   So What is a Support and Resistance lines ?

    Support is a Price level or a zone of a certain asset's or futures that prevent a price to fall even further. Support reflecting Market psychology where Bear power exhausted and Bulls are coming in, Because the price is quite low, more and more people are more eager to buy rather than sell which in return bounce the price to goes up. 

    Resistance in the other hand is a price level or a zone of a certain asset's or futures that Resist the price to goes even higher because this is the price level where most people will be more eager sell their position either for profit taking or for "Sell the High".

    Support and Resistance is not a permanent things, Support and Resistance line can and will be break over time if there are enough catalyst in the Market. 

 

 There are two types of Support and Resistance : Static and Dynamic. 

A Static Support and Resistance are solely based on the price itself, drawing a static support and resistance lines is actually quite straight forward, we begin to find a price level in the past where when a price touches that level it bounce and hold that level.

A Dynamic Support and Resistance are provided by Indicator, the most simple example is by using Moving Average Indicator as Support and Resistance level.

 

Trading with Average True Range (ATR)

ATR or Average True Range is an indicator that measures volatility, the more comprehensive introduction of ATR indicator can found at this link Average True Range (ATR) Definition. 

    Average True Range formula:

ATR Formula

    At first, it was difficult to understand the use of this indicator, even when every website and other multiple sources said that this is the greatest tool to measure volatility. But how to apply this in trading?

USING ATR INDICATOR AS ENTRY

When trying to go long(Buy), subtract the opening price of the candlestick with the ATR value and put the Buy Limit Order.

When trying to go short(Sell), add the opening price of the candlestick with the ATR value and put the Sell Limit Order.

 

 The Profit Target and Stop loss can use the multiplication of the ATR value, e.g: 2 times the ATR value is normally used.

 I've noticed that the market normally reverse/retract when the price reaches ATR value, it just like the market was run out of steam or just resting for a bit before continuing the action or even decided to reverse. This is when I found out the importance of using ATR in my trading setup.

In my previous post, I'm using Bollinger Band and Awesome Oscillator as the entry point while it was actually working, I am having difficulties to set the TP and SL. ATR Indicator solves this problem for me plus by using ATR I was able to enter the Market at the better price.

 

The Principle of trading is: BUY LOW AND SELL HIGH

The principle of a good trading Setup is:

1. When going long, make sure your entry price is low and when going short, make sure that your entry price is High.

2. Where to take profit and where to cut loss.

 

 

 

 

 

Trading GBP before News

18-Sept-2019

 

This is GBP USD before Economic data.. this pair has been down since morning. Its actually "Buy the Rumour Sell the News" since the consensus is lower than the previous data.

 

here is the result of the economic data.

 

 

CPI is lower than the consesus.. GBP USD should be down !.

 

but I wont bet too much on this trade because later on at midnight there will be FOMC announcement from the Fed. Which will likely affecting all currency pair.