The following trade is one the Australia Dollar vs the US Dollar and it’s a trade where multiple timeframes are in alignment. After the AUDUSD reached just above 0.7100 on the daily chart we’ve had a sign of weakness, selling pressure. This has caused the Aussie dollar to drop over the last 3 days.
In this trade, we had trend alignment in all the timeframes that I monitored: 1 min, 5 min, 15 min, 30 min and 60 min.
At point A, we have an up bar on ultra-high volume and the next two down bars on ultra-high volume as well. The first down bar is widespread which closes on the lows showing there is weakness and the next down bar confirms the weakness. Ultra-high volume on a down bar is strength and we see the market rally but the rally is on decreasing volume. We set our trigger point on the highest volume bar and we’ll patiently wait for the price to cross below this level.
Point B we see the pricing action mushrooming over and each time price tests the highs it’s on decreasing volume. The price crosses below our trigger point and we get the sign of weakness, No Demand. Our entry is on the low of the confirmation bar.
Trade Outcome:
Entry Price: 0.70517
Stop Loss: 0.70750
Profit Target: 0.69950
Exit Price: 0.69950
Profit: USD$567