AUDUSD - Trading the trend using price action.
AUDUSD has been in a decent uptrend of late, so how we as traders can help increase our probability of not only finding a way to enter this kind of market environment but also trading in line with the current trend direction is by waiting for potential bullish signals to form.
If these bullish patterns (in the case of an uptrend) occur after a pullback in price, this can help increase your probability for a successful, manageable trading opportunity and allow for you to execute at a better price.
As you can see from the 15 Minute chart, price started to drive lower while also creating a liquidity gap in the process left open. At the base however we can see price start to form a bullish head & shoulders pattern in the process.
As with all patterns we look to trade we want to wait and look for a higher trend line (in this case a potential bullish move) and be patient for this trend line to hopefully break to the upside therefore increasing our confirmation that the pattern could hold.
For trade management we would look to use the liquidity gap filling as our first target area and also the 72.00 big figure as our next. Stop loss could be placed below the left and right shoulders or below the head of the pattern.
If these bullish patterns (in the case of an uptrend) occur after a pullback in price, this can help increase your probability for a successful, manageable trading opportunity and allow for you to execute at a better price.
As you can see from the 15 Minute chart, price started to drive lower while also creating a liquidity gap in the process left open. At the base however we can see price start to form a bullish head & shoulders pattern in the process.
As with all patterns we look to trade we want to wait and look for a higher trend line (in this case a potential bullish move) and be patient for this trend line to hopefully break to the upside therefore increasing our confirmation that the pattern could hold.
For trade management we would look to use the liquidity gap filling as our first target area and also the 72.00 big figure as our next. Stop loss could be placed below the left and right shoulders or below the head of the pattern.