Forex Technical
Failed Bull Crown on the AUDUSD Hourly
April 28, 2010
Gary Fichardt - FxBigDog
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Chart Analysis
On the AUDUSD daily the market find support at the back of a counter trendline, old high and an up fib level.
In yesterdays trading session the market dip to a deeper fib level, and re-testing that counter trendline for the third time in 10 day period. The market once again fail to stay below with a very aggressive bounce off the support.
Trader trading the daily price swings will find it really simple to hold there position long with wide stops, but that does not help the intra-day trader as we move to longer time frames and tighter stops.
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Analysis
On the hourly chart we had a bull crown setup that seemed like the holy grail trade if there is one. The only thing left for traders to find was a bullish candle formation to take on buy positions.
Traders that entered on this trade and then were stopped out, should pause for a moment before reacting as the lower time frames are not in sink with the daily chart. Daily support is still holding, but yet the bullish pattern formation failed. Not aggressive trader will be reversing their position when a crown fails, but that could be uneducated decision.
Allow the time frames to work together in the same direction to increase your chances of success. When in doubt, stay out!!!
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