Trend analysis and short term trading strategy
Attached below is the daily trend chart for USDINR .
Inferences from the image are that
- Long term trend identified is an Up trend.
- Price is supported at any of the two . If there is any deviation from these lines, it shall imply that the price is either forming a new trend or entering into a long term correction.
Identification of trading opportunities
To identify immediate trading opportunities, highlighted area in at present is under correction is assessed in hourly chart.( )
Highlighted area in 1 hour chart looks as shown. ( ) as follows.
1 Hour chart trend analysis
For better understanding, both the chart and the line charts are attached. These charts shall clarify the use of two at the bottom (Now only bottom lines are important) because market shall either obey closing price trend (line chart) or shall even take the highs and lows(Candle chart) into account.( ) ( )
Firstly the pattern in 1 hour chart has invalidated the pattern by breaking below the black (resistance). This confirms that the bullishness is to be paused a while.
After breaking the black (previous resistance) it moved down sharply and is retracing back to previous resistance (black line).
Current price action is between the two resistance lines.
As no definite down could be drawn at present, markets shall either get into a very short time correction or the price shall experience further resistance at the current zone and shall fall further.
Look out for candle stick pattern or chart pattern in i hour chart to enter trade.
Conservatively enter short only upon breat out of the current low. ( )
Stop loss: Shall be above the previous high(approx 73.0) which shall be confirmed upon break out below 72.42
Target: To the blue support which is derived from (approx 72.0 to 71.5)
Caution: 72.0 to 71.5 is not valid target. Actual target shall be the blue support in .
Conservative trade setup snap shot: