Pattern Trader - May Trade Analysis, Trade Set-ups and Profit (Loss)

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Ernest Houston
5 years ago
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1 Pattern Trader - May Trade Analysis, Trade Set-ups and Profit (Loss) Currency Pair: GBPCAD Entry Order: BUY Stop loss: Take profit: Trade Risk Profile: 1.0% Analysis: This is a repeat analysis of last week. Although we got stopped out, I still feel like there is a possibility of a quick burst to the upside in this pair. While GBPCAD has been in a pronounced down-trend for most of this year, a few weeks ago prices stopped going down, and formed a small Double-Bottom (bull) price pattern at around the level. I feel if we take out the high of Friday's "hook-up" or Key Reversal, you could see an explosive move (higher) out of this "area". I really like the risk:reward potential on this trade.

2 Currency Pair: AUDUSD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.75% Analysis: AUD$ appears to be the weakest currency vs the dollar. We are tracing out a reverse wedge triangle in this pair. The near-term target is the horizontal support line at about the price level. Penetration below the low of Friday's Key Reversal bar will probably send this pair lower..in quick order!

3 Currency Pair: GBPNZD Entry Order: BUY Stop loss: Take profit: Analysis: This is an admittedly early call. GBPNZD appears to be tracing out a (potential) Double-Bottom (bull) price pattern. (Confirmation of a Double-Bottom price pattern would only come with a penetration above the neckline at the price level. That being said, I feel if we get above the high of today's Key Reversal bar, we could see an explosive move (higher). Risk Management: I am already Long GBPCAD. Both GBPNZD and GBPCAD are closely correlated to the GBP currency. I am electing to take both trades, with 1.0% risk on GBPCAD, and, 0.5% risk on GBPNZD.

4 Pair: XAUUSD (spot Gold) Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.3% - 0.5% Analysis: Last week it appeared that XAUUSD had broken out (to the upside) on the Weekly charts. While that may be still the case, objectively, the past two trading session Key Reversal bars (at an important resistant level) is hard to ignore. So, while I don't know if this is just a temporary set-back in an uptrending market, or a bull "trap", the past two session dismal price action suggests that taking a nibble at the short-side could yield good rewards. Keep your risk low on this one.

5 Currency Pair: CHFJPY Entry Order: BUY Stop loss: Take profit: Analysis: As with XAUUSD, this call may also be a reach. CHFJPY is in a clear down-trend. However, in the past two trading sessions this pair has been unable to make any further progress to the down-side. I feel if we take out the high of today's inside-day bar, we could see a surprise...and healthy...pop to the upside. I like the risk:reward on this trade.

6 Currency Pair: GBPAUD Entry Order: BUY Stop loss: Take profit: Analysis: I made 472 pips on the Long-side of this trade last month. In my analysis then, I predicted this pair could go up 1,000 pips or more. It has already done that, but I think there could be (much) more left in this trade. Following a break-out from an Inverted Head-and-Shoulders (bull) price pattern, in today's trading session we formed an inside-day / NR4 bar (the narrowest trading range in the past four trading sessions. Should we get above today's high you could see this pair smoke higher. The challenge is where to place the stop. In my last three trades I got stopped out only to see the trades eventually go back in the direction ( and profit) as I originally anticipated. I have attempted to give this trade some room with the stop today - however the SL should be below the low of today's range at

7 Currency Pair: GBPNZD Entry Order: BUY Stop loss: Take profit: Trade Risk Profile: 0.75% Analysis: This pair appears to be in the early stages of a turn-around (or bounce) following a huge bear market. I may be dreaming, but it appears we are on the cusp of forming a Double-Bottom (bull) price pattern. Confirmation of the Double-Bottom would only come with a penetration above the neckline at the price level. That being said, I feel if we get above the high of today's Key Reversal bar, we could see an explosive move (higher).

8 Currency Pair: GBPJPY Entry Order: BUY Stop loss: Take profit: Analysis: Most JPY-cross pairs got creamed in recent days. However, I am seeing signs of support at current levels. If we take out the high of today's inside-day bar, you could see a quick and powerful burst to the upside. Risk Management: Both GBPNZD and GBPJPY are closely correlated to the GBP currency. I am electing to take both trades, with 0.5% risk on GBPJPY, and, 0.5% risk on GBPNZD.

9 Currency Pair: EURUSD Entry Order: SELL Stop loss: Take profit: Analysis: Following several weeks of traversing higher, last week, EURUSD got smacked (lower) at its long-term resistance level (around ) - forming a nasty Key Reversal on the Weekly charts. While this adverse price action is likely only a "hiccup" in a longer-term uptrend, following last week's dismal price action (Key Reversal and apparent Reverse wedge triangle), we could see prices fall back to the level.

10 Currency Pair: GBPAUD Entry Order: BUY Stop loss: Take profit: Analysis: Last month I tipped this pair could go up 1,000 pips or more. It has already done that, but I think there could be more left in this trade...i am targeting the gap at the as the first major price objective for this pair. Recently, this pair formed a very bullish Inverted Head-and-Shoulders (bottom) price pattern. Should we get above the high today's inside-day bar, you should see further upside momentum in GBPAUD.

11 Currency Pair: NZDCAD Entry Order: SELL Stop loss: Take profit: Analysis: For the past three months NZDCAD has been traversing lower within a well-defined trading "channel". In today's session, following hitting resistance at the top-end of the channel, this pair dramatically reversed direction. It feels like the recent "heavy" price action is poised to send NZDCAD back to the level and probably (much) lower.

12 Currency Pair: GBPCAD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.75% Analysis: GBPCAD is in a primary down-trend. In the past few weeks we have seen a counter-trend rally from the to price level. However, today's Key Reversal at an important resistance area, suggests the down-trend is poised to continue. Risk Management: I am already Short NZDCAD. Both NZDCAD and GBPCAD are closely correlated to the CAD$ currency. I am electing to take both trades, with 0.5% risk on NZDCAD, and, 0.75% risk on GBPCAD.

13 Pair: XAUUSD (spot Gold) Entry Order: BUY Stop loss: Take profit: Analysis: In my last Weekly Video Report I did an extensive analysis on XAUUSD, and made the case why we could be setting up for a massive rally in this pair. Today's Key Reversal in the direction of the trend, just could be the match that lights this fire!

14 Currency Pair: AUDCAD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: For the past several sessions AUDCAD has been consolidating under the neckline of a large Double-Top (bear) price pattern. Should we penetrate below the low of today's inside-day bar, we should see a quick burst to the downside. I am targeting a smaller take-profit on this trade (even though the Monthly charts suggests there is more room to the downside).

15 Currency Pair: USDCHF Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: In today's session we formed an inside day bar at a Double-Top peak. Penetration below today's low would suggest that the momentum will be back to the downside.

16 Currency Pair: EURGBP Entry Order: BUY Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: Today's "hook-up" or Key Reversal in the direction of the underlying (up) trend, suggests the upside momentum will continue.

17 Currency Pair: EURUSD Entry Order: SELL Stop loss: Take profit: Analysis: Following several weeks of traversing higher, last week, EURUSD got smacked (lower) at its long-term resistance level (around ) - forming a nasty Key Reversal on the Weekly charts. While this is an early call, it appears EURUSD is forming a Reverse Wedge Triangle. Should we penetrate below the low of today's inside-day bay, I believe prices will fall to the (first) price objective, at the horizontal neckline, at about the price level.

18 Pair: XAUUSD (spot Gold) Entry Order: SELL Stop loss: Take profit: Analysis: For the past few weeks I have been edging into the bullish camp on the yellow metal. However, today's devastating Key Reversal price action, at or near a previous Double-Top (bear) price pattern, was not helpful to those in the bull camp. (As traders we have to be constantly mindful and vigilant of our inherent biases, and be prepared to switch positions or cut our losses when objective/empirical price action does not support or biases). While it is probably too early to tell if we have topped out or just consolidating at the recent highs, today's Key Reversal price action suggests it may be worth taking a shot on the short-side. You may, or may not want to follow me on this one. But I'm going to take this trade with a small (and acceptable) risk.

19 Currency Pair: GBPNZD Entry Order: BUY Stop loss: Take profit: Analysis: GBPNZD appears to be in the process of forming an Inverted Head-and-Shoulders (bullish) price pattern. Penetration above today's "sneaky" Key Reversal bar could be the catalyst for a healthy burst to the upside.

20 Pair: XAUUSD (spot Gold) Entry Order: BUY Stop loss: Take profit: Analysis: XAUUSD appears to be in the process of tracing out an Inverted Head-and-Shoulders (bull) price pattern on the Weekly charts. Last December XAUUSD took off from a Double-Bottom (bullish) price pattern, and, in recent days it appears that this pair has formed a "flag" price pattern on the Daily charts. A break above Friday's inside-day bar could be a catalyst for a broader move higher, or a fake-out, and a return to the trading range behavior we have seen in the past couple of weeks. Notwithstanding, I think it's worth a shot to probe the upside of XAUUSD. Eventually I think the pay-off could be big. For a more detailed analysis of XAUUSD click the link to my Weekly Video Report above. Flag Identification Guidelines Shape -- Looks like a small rectangle often tilted against the prevailing price trend. Trend lines -- Prices move between two parallel, or near parallel, trendlines. 3 weeks -- Flags are short, less than 3 weeks long. Patterns longer than that are rectangles or channels. Flagpole -- The flagpole which leads to the flag should be unusually steep and last several days.

21 Currency Pair: GBPNZD Entry Order: BUY Stop loss: Take profit: Analysis: This is a repetition of my analysis and trade signal of this pair last Thursday, which did NOT get triggered. GBPNZD appears to be in the process of forming an Inverted Head-and-Shoulders (bullish) price pattern. Penetration above Friday's inside-day bar could be the catalyst for a healthy burst to the upside.

22 Currency Pair: CADJPY Entry Order: BUY Stop loss: Take profit: Analysis: In Jan-Feb timeframe this pair formed a classic Double-Bottom (bull) price pattern. Since that time CADJPY has been trapped in a trading range between and Today's Key Reversal at the lower end of the trading band, suggests this pair could be heading to head back to the resistance area again.

23 Currency Pair: EURCAD Entry Order: SELL Stop loss: Take profit: Analysis: In Feb-Mar timeframe this pair formed a classic Double-Top (bear) price pattern. A few weeks ago this pair put on a tepid rally that appears to be running out of steam. Today's reversal bar could be the catalyst for re-establishing the momentum to the downside.

24 Currency Pair: EURJPY Entry Order: SELL Stop loss: Take profit: Analysis: EURJPY is in a long-term downtrend on both the Weekly and Daily charts. Penetration below today's Key Reversal bar could be the catalyst for further price erosion in this pair.

25 Currency Pair: EURCAD Entry Order: SELL Stop loss: Take profit: Analysis: EURCAD appears to be tracing out an Inverted Head-and-Shoulders (bull) price pattern. Penetration above the high of today's "mini" reversal/inside-day bar could see further traction to the upside. Keep your risk low on this one. (Not a lot of pickings for tonight in terms of hi-probability set-ups. GBP appears very strong and likely to go stronger against most currencies, and CAD appears weaker against most currencies).

26 Currency Pair: EURJPY Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 1.0% Analysis: EURJPY is in a long-term downtrend on both the Weekly and Daily charts. Penetration below today's inside-day bar could be the catalyst for further price erosion in this pair. I have tried to get short this pair a few times in the past few days, but following the recent weak price action in this pair the timing feels right to EURJPY ripe to keel over...and head (much) lower from here...i like this trade...possibly worth a higher risk allocation.

27 Currency Pair: AUDCHF Entry Order: BUY Stop loss: Take profit: Analysis: AUDCHF appears to have formed a Double-Bottom (bull) price pattern in the Feb-Mar timframe. Today's healthy Key Reversal, following a steep retracement, feels like this trade has some very good potential on the upside.

28 Currency Pair: USDJPY Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.75% Analysis: Since falling off a cliff in early May, USDJPY has clawed its way back to current levels. However, I don't put much faith in rallies from a single bottom price. Accordingly, I feel prices will retrace back to the May low. Penetration below Thursday and Friday's narrow-range bars will likely be the catalyst for a good decline in prices.

29 Currency Pair: USDCAD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: My analysis for this pair is pretty much the same as for USDJPY. USDCAD formed a V-bottom at the price level. I feel this pair needs to consolidate further. Accordingly, I think f we penetrate below Friday's inside-day/nr4 bar (the narrowest range in the past for trading sessions), we could be in for lower prices from here. Risk Management caution: I am already Long EURCAD. Adding this position is further correlated to CAD, so not altogether diversified. I think it's worth taking a 0.5% risk on this trade.

30 Currency Pair: NZDUSD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: Recently NZDUSD formed a Double-Top (bear) price pattern at the price level. Penetration below today's Key Reversal low will likely confirm a further price down-turn in this pair.

31 Currency Pair: EURNZD Entry Order: BUY Stop loss: Take profit: Trade Risk Profile: 0.50% Analysis: EURNZD has been trapped in a trading band between and Penetration above today's Key Reversal high will likely result in further momentum to the upper level of the trading band...and probably (much) higher. Risk Management caution: Both of tonight's trade set-ups are correlated to the NZD$, so not altogether diversified. I think it's worth taking a 0.5% risk on each trade.

32 Currency Pair: EURNZD Entry Order: SELL Stop loss: Take profit: Trade Risk Profile: 1.0% Analysis: EURJPY has been descending in a stair-step fashion over the past several months. Over the past three months, this pair has formed a tight "congestion" zone between and I believe the support level will be taken out (soon). Penetration below the low of today's NR7 bar (the narrowest trading range in the past seven trading sessions), will likely be a catalyst for a healthy move to the downside.

33 Currency Pair: GBPCAD Entry Order: SELL Stop loss: Take profit: Analysis: Today's Key Reversal at a pivotal resistance level will likely send prices (temporarily) lower from present levels.

34 Currency Pair: NZDJPY Entry Order: SELL Stop loss: Take profit: Analysis: NZDJPY appears to be tracing out a (bearish) Descending Wedge Triangle price pattern. Penetration below today's small reversal bar could be the catalyst to lower prices from here. Risk Management caution: I am already SHORT NZDUSD. Adding this position is further correlated to NZD, so not altogether diversified. I think it's worth taking a 0.5% risk on this trade.

35 Currency Pair: AUDJPY Entry Order: BUY Stop loss: Take profit: Analysis: The price zone appears to be a powerful support area for this pair. Today's Key Reversal feels like "dagger in the sand", and could be the catalyst for a surprise, and quick, burst to the upside. Trading note: Recently, I have been admittedly bearish the JPY-cross pairs. However, today's pronounced reversal price action in most of the J-yen cross pairs suggests there is something afoot...and we may be witnessing a contrary move brewing at current levels.

36 Currency Pair: AUDCHF Entry Order: BUY Stop loss: Take profit: Analysis: AUDCHF formed a Double-Bottom (bull) price pattern in the Jan-Feb time-frame at the price level. Following a retracement from recent highs, this pair has for another interim Double-Bottom at the price level. Penetration above today's Key Reversal high will likely result in continued momentum to the upside. Risk Management caution: Both of tonight's trade set-ups are correlated to the AUD$, so not altogether diversified. I think it's worth taking a 0.5% risk on each trade.

37 Currency Pair: GBPJPY Entry Order: BUY Stop loss: Take profit: Trade Risk Profile: 0.75% Analysis: It appears that GBPJPY is in the process of forming both a Double-Bottom and an Inverted Head-and-Shoulders (bullish) price patterns. Final confirmation of theses price patterns will be a breach of the neckline at about the price level. However, should we take out the high of Friday's reversal bar, I think it's worth a stab at getting a position on ahead of the neckline breach.

38 Currency Pair: EURCAD Entry Order: SELL Stop loss: Take profit: Analysis: EURCAD collapsed out a classic Double-Top (bear) price pattern in the Feb-Mar time-frame. Following a lengthy congestion period, recently this pair formed an (interim) Double-Top price pattern at the price level. Should we take out the low of Friday's Key Reversal price action, I think there is a good chance of EURCAD retracing back to the price level.

39 Currency Pair: GBPAUD Entry Order: SELL Stop loss: Take profit: Analysis: The recent explosive rally in this pair feels extended. I think the Key Reversal of a few trading sessions ago, suggests that GBPAUD has peaked out in the short-term. Today's session (inside-day bar) is within the high and low of the Key Reversal bar. I think it is worth probing the short-side of this pair.

40 Pattern Trader - May Trade-by-Trade Profit (Loss)

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Pattern Trader - April Trade Analysis, Trade Set-ups and Profit (Loss) Pattern Trader - April - 2016 - Trade Analysis, Trade Set-ups and Profit (Loss) Currency Pair: EURJPY Entry Order: SELL stop @ 126.94 Stop loss: 127.57 Take profit: 125.18 Analysis: EURJPY has been going