This morning, we received an Ichimoku email alert buy opportunity on the AUDCAD spot currency for the Forex market. Here is the email alert:
Remember, the email alerts are buy opportunities. It is a filtering mechanism…not a “FOR SURE” buy. There is no 100% out there….there are only opportunities.
On viewing this opportunity, you can see there was no Ichimoku setup on the 120/240/Daily time frame. This means that were could be a problem with the swing and higher time frame for this opportunity. This is an opportunity setup that the day trader created but the swing and the long term traders are not thinking the same way.
We are going to look at the 60m chart since it was the only time frame that had a cloud strategy i.e. 4. The 30m had a counter trend strategy since it was a 2. Below the 60m chart. In examining the chart, the following was noticed:
- The Green line which was my support was no longer flat when this email alert came out. This mean my support is weak now.
- There was not multiple time frame match with the green support to other time frames. It was to the 240m time frame but no higher. This means a pull back on the higher time frames could get me stopped out and then it goes my direction….i.e. I could get “clipped”. Therefore, we can not put a pull back trade on with high probability of success.
- The daily time frame sentiment is consolidating and price is having a hard time leaving the cloud.
- The weekly time frame is bearish consolidating holding the resistance at 0.9732.
- Resistance on the weekly is 0.9732 so if we entered a breakout trade, it would not be a good reward/risk …i.e. less than 3:1 reward/risk. Money management tells us that a breakout trade can not be place.
Below is the weekly chart. You can see it is bearish consolidating holding the resistance at 0.9732. Therefore, any bullish trades taken on the lower time frames will have limited reward.
Summary: We can not take any bullish trades until price closed above the weekly resistance. All the higher time frames are still bearish so only bearish trades are allowed. However, the lower time frames are bullish so we have to wait for the lower and swing trading time frames to break the MTF support in order to look for bearish trades. In another words…be PATIENT!
If you would like to learn how to trade like an institutional trader or learn more about our multi-timeframe email alerts, go to www.ichimokutrade.com or email us at info@eiicapital.com
EDUCATIONAL USE. Commodity Futures Trading Commission, Forex, Futures, Equity and Options Trading has large potential rewards, but also has large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provided on the Blog is for educational purpose.
