Trading Corrective Move - a cristal clear setup

Since last week I have been visualizing the future price move to be intra-week bullish (YTC PAT teach how to visualize the future price move)


Please Notice that the link on these page would lead you to FMM, LST, YTC-PAT and Trend Collapse official page as asked by the author. Yet the systems are available free in Indo-investasi as well as other thread anyway. Legal or illegal depend on your respective stand.

On the last paragraph of the post:

http://trading-price-action.blogspot.com/2012/06/1671-pips-on-june-1st-creative.html

I've been expecting both GBPUSD and EURUSD to have an intra-week bullish move.

"But seeing the M15 chart I was thinking of a short term future price visualization for the next week. Base on the large pile of Buy at this demand area, next Monday i would expect an intra-week bullish move that preceded by a stop hunt low to test the low, straight long trade, or a gap-up price then fill the gap to test the low. Here is where LST and FMM (Klik the link if you aren't familiar with it) play their part but we already know what to expect. Lets see them prove themselves."

They were indeed bullish:

 EURUSD H1 (240 Pips Weekly Range):

 GBPUSD H1 (270 Pips Weekly Range):

   

And the bearish move on Thursday - Friday has also been pre-analyze. Look at the comment on the above mentioned post.

"Since the early week Both EURUSD and GBPUSD indeed move bullish as have been visualized (Monday up, Tuesday correction, Wednesday Up)

As of June 6th, end of US session EURUSD halted by Supply Area while GBPUSD has been halted before US session and made choppy topping formation.

On D1 EueUsd has seen a potential Bearish hidden divergence, means if tomorrow the price reverse down then it would be a bearish resume of a D1 bear.

Align with D1, both H4 and H1 has also showing a potential Bearish Regular divergence, means if the price reverse down then it would be a reversal for H4 and H1

While on M15, EurUsd made a last thrust and halted by a Supply area. If tomorrow M15 reverse down then it would validate the premises for H1, H4 and D1.

Price must turn Bearish around this point to validate the divergence state. Otherwise, if a sentiment occurred and pulled price up that also pulled the divergence away then the divergence setup would be invalidated since H1 H4 and D1 is just a potential divergence, not valid yet.

But seeing all aspect aligned I am strongly believe that my premises would be true.

Remember though, anything could happen. Lets see the market reveal it self." 

And:

"GbpUsd has also showing the same state but the sign on EurUsd were clearer. Tomorrow might be what Steve Mauro called a Mid - Week reversal"

They were indeed reversed down for 180 Pips (EURUSD) and 200 Pips (GBPUSD).

But even both pairs bullish it doesn't mean there would be no short opportunity. At least there were 2 short opportunity along the way when the price made corrective on both EURUSD and GBPUSD.

On June 5th EURUSD made sharp corrective:

Well, do not mind about the pips gain (but if you curious zoom the top right hand side to the real time pips gain indicator and count your self). I don't want anyone called me boasting my Pips gain anymore. I was thinking that the Pips gain shown by the indicator on the top right chart was enough.

The point here is, during a bullish move there would be a corrective and the corrective move will always steep like a falling rock, but it must be seek carefully. 

As I have always said, during a strong trend the price would diverge several time before actually reverse. The price were rejected by a SUPPLY area created on May 29. On MMM template it was two pins/shooting star to the blue/yesterday high and S1 at the same place. Yet I took the first short after the price broke down the Trend Line the back to test the broken trend line with the second pin (Hector's - Free Trend Collapse).

Steve Mauro might call this a CRYSTAL CLEAR SETUP but he failed to make it clear to his student. Newbie of MMM would try to catch all the M/W formation thinking that he/she caught the top/bottom. 

Vladimir would have probably did the same thing. He put less explanation on the confirmation required after a Divergence setup emerged. He only said that any familiar clarification would be required. Anything that the user familiar with such as Trend Line and Support/Resistance. He put less importance that this point is the difference between life and death.

See how many times divergence occurred yet no reversal. If trader rely the entry solely on divergence they would wipe their account. 

"Divergence should only be treated as SETUP while ENTRY should not be taken based on divergence but by the PRICE it self"

On the other hand Russ Horn's Forex Master Method did a better job to give teaching on divergence knowledge.

On EURUSD trade above, I was tighten my stop right above the ADR low (Thick red line) but as I see a second failed test to the DEMAND area I exit all position and wait for a retrace to have re entry.

It was a hidden bearish divergence by Stochastic so I enter 2 units, about 5 to 9 Pips of the high. The stop was above the swing high but as a see candle close with a hammer and a potential regular bullish divergence on Stoc I tightend the stop (see the red dashed line, the picture taken while the second stop haven't been moved). The stop was hit by -1 and -2 Pips.

SEE,,, Why still anyone accused me of hiding my loosing trade. I've shown some of the loosing trade. Just like the following trade:

As have been spotted, it was a Regular Bullish divergence so I enter 2 units on the second failed attempt to test the low that leave the second Hammer. New trader should have not done this unless understand the price action. 

See M1 chart for better Price Action reading. Additional 1 unit long when the price took off and broke the trend line (it is the safest entry). Later I did a stupid mistake breaking my own rule "Never chasing the price". The last green bar on M15 was a quick move. I jumped in with 1 unit long just later to see the price action on M1. 

Look at the three pins to the high. That told me that the move up is going to failed. I was aware that the bullish divergence was still valid and nothing to halt the price to move up. If only I hadn't enter the last Long I would still hold the stop under the swing low of M15 and I would not have adjusted my stop to the last swing low of M1.

The stop was to tight. The price just move lower than the swing low of M1 chart by 1 Pip, just to take out my stop then move up nicely, as Steve Mauro called "BACK INTO THE RANGE", for about 50 Pips.

I was stopped out for about 10, 9, 5 and -13 Pips. See that,,, it was a loosing trade but still small profit.

The same situation also on GBPUSD, June 5th but i didn't take any trade since GBPUSD was move wildly:

Another trading on Corrective move also spotted on June 6th, EURUSD and GBPUSD:

See that all the teaching material (Price action, YTC PAT, Al Brooks, Vladimir's LST, Sam Seiden Supply and Demand, Steve Mauro's MMM, Russ Horns's FMM, etc) work hand in hand in trading.