On the way down the best ‘short’ trades if you want to trade random entries with much wider stops than what day-traders use, then you trade the Weekly 50% levels on the way down.
The best trades always occur from higher Weekly opens or higher Daily opens as the trend continues down, and as prices are moving down from resistance along with higher Daily opens, not rising upwards from lower opens, as was the case on Tuesday.
Euro Weekly and 3-day pattern
Therefore on the Euro on Wednesday we have the Weekly 50% level and a higher Daily open on Wednesday, which normally would provide the ideal set-up to trade down…….
And as per yesterday’s Daily report….Above the 3-day filter and expectation that price 'could' move into a breakout on the upside during US timezone, as it rotates back towards the higher timeframes.
In the Forex section of the book, there is a very similar chart :- figure 82.
Whilst above 1.2834 and the 3-day filter on Tuesday (Yellow) you are anticipating the breakout of the 5-day 50% level, which normally breaks during the US timezone, also confirmed with the 3-day high breakout.
Let’s subscribe to Text book patterns again….
The Weekly 50% level and a higher close, but it's trading above the 5-day 50% level.
There is a breakout of the 3-day range and above the 5-day 50% level, therefore there is an expectation that the Euro could move higher.
Therefore you can short the Weekly 50% level from a higher Daily open, but unless it's back below the random support shown in the 3-day chart:- 5-day 50% level, the Euro can easily continue higher.
Your best trade is going to be shorting around the 5-day highs around 1.3202 and or the 3-day filter if you want to position trade the Euro.
If that trade works and begins to move down, it might take a number of days to begin to move lower, as it's above the 50% levels of the Weekly and 5-day 50% level:- figure 82 in the book.
But also keep in mind that a Weekly 50% level HOOK pattern could result in a higher Friday close.
So that a Short around 1.3202 or lower might only be valid for 1 day, but we won't know that until proven wrong.
Then this gets back to 'short' trading a higher weekly open from next week.
AUD Weekly and 3-day patternSame breakout pattern in the 3-day chart on the AUD, but the important part is the February 50% level.
I subscribe to lower prices in February, therefore Wednesday’s 3-day filter is my trend and shorting guide…
I’ll know right away whether I’m wrong or not, as price can follow Tuesday's range higher towards the February 50% level, which probably makes much more sense if it is rising upwards from the 5-day 50% level.
GBP Weekly and 3-day pattern
GBP could continue higher.....
And if it follows the Weekly 50% level Hook pattern, price could make it’s way back towards the February 50% level and as high as the Weekly highs:- Higher Friday close.
But the 3-day filter is the trend guide, and any weakness can begin from this level, but won’t be confirmed until price is back below the 5-day 50% level.
In conclusion:- The monthly 50% level is the trend guide, and the Weekly 50% levels are the trend guides.
The Trend is down, therefore the most robust shorts occur from either the higher tiemframe 50% levels or Higher opens as short-term timeframe 50% levels break:- 5-day 50% level.
At this stage I would like to think that prices are going to reverse down on Wednesday from a higher Daily open and also the Weekly 50% levels, but I know that the 3-day breakout from Tuesday can send prices higher from Wednesday's 50% 5-day 50% level.
