All Reversal trades are still counter trend trades
Previously we were looking at AUDNZD with a opportunity for a reversal.
Why do we want to trade a reversal if it is still considered a counter trend trade? The answer is simple, a reversal if successful, can also be the starting point of a new trend which can potentially allow us to ride the trade for some time.
So let’s take a look at AUDNZD as a point by point analysis using the H4 charts.
- Previous trend was Down
- Following a Bullish expansion, a 1234 pattern was also formed. This pointed to a possible H4R.
- H4R failed when price expanded down below the previous 3 weeks lows which fits the criteria of a BM.
- Current week (Wk#9), look for price to retrace to previous resistance levels in the form of a 1234 pattern.
- Take note, if price is to continue to be bearish, it needs to stay below the resistance levels.
UPDATED 12th March 2014 (by Jerome)
Price has since moved 100+ pips for this pair, look out for next support levels as areas to do trade management.
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