USDCHF - EDUCATION: Multiple opportunities for entries

EDUCATIONAL PURPOSES:

This is a review on my analysis for USDCHF (link will be posted below). This is a bearish trade, looking for a rejection off the Critical Zone (CZ) and for price to head downwards.

At Critical zones, one can look out for reversal patterns for a signal to enter long/short. Some examples would be: bullish/bearish engulfing candlesticks, 3 inside up/ 3 inside down, dark cloud cover pattern. There are many other patterns you can use as well!
As per my previous post on trading with divergence signals, one can also use RSI as a supporting indicator. In this above analysis, one can look out for RSI divergence signals as a confirmation to reversal patterns.

Personally, what I like to first look out for are long wicks, indicating rejection to the upside/downside (whichever bias you have). Wicks are part of market psychology, and show that there is insufficient support in the market to 1) push the price upwards or 2) bring the price down. From then, I will start looking out for more confirmation through either supporting reversal patterns or price action.

For this trade, I have indicated several opportunities for short trade entries, encompassing reversal pattern and/or price action indications.

Note Entry 4: Some traders may not look at wicks, but for a good price action trader, even knowing that the wick did not break the recent wick high/low will affect the trading bias/plan.

**Do note that your broker also affects the appearance of wicks in the data.

There are definitely more chances for entries, and can be found out by back-testing data on which candles/patterns work for you. Do take a look, review and see if there have actually been opportunities that you have missed out on, and could possibly employ to your trading strategy.

Feel free to discuss and comment, Cheers!

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