Brief Summary
This video provides a commentary on the Euro/Dollar currency pair, focusing on how to identify and trade using breaker patterns within market structure. It explains how to identify potential buy and sell setups based on the violation of previous lows or highs, and subsequent retracements. The video uses specific examples from the week's trading activity to illustrate these concepts, emphasizing the importance of understanding market structure for successful trading.
- Identification of bullish and bearish breaker patterns.
- Using Fibonacci retracements to find optimal trade entries.
- Importance of understanding market structure for trading decisions.
Euro/Dollar Commentary Intro
The analyst begins by stating his intention to provide commentary on the Euro/Dollar, observing price movements day by day. He notes a short-term high and anticipates price movement above it, marking it as a point of interest.
Analyzing Market Structure and Fibonacci Retracement
The analyst discusses how price eventually breaks through a high, signaling a break in market structure. He explains how to use Fibonacci retracements, anchoring from the lowest point to the highest point of a swing, to identify potential buying opportunities. If price trades through it, the higher body candle will be used to anchor to trail. He identifies a specific area where price trades down, suggesting it as a buy point targeting a previous high for profit.
15-Minute Time Frame Analysis and Optimal Trade Entry
Moving to a 15-minute timeframe, the analyst observes the Euro/Dollar rallying after a slight violation of a key level. He points out that the rally breaks market structure even on this lower timeframe. He identifies a deeper retracement into another optimal trade entry, specifically around the 62% Fibonacci retracement level relative to the daily chart.
Overlapping Optimal Trade Entries and Confluence
The analyst highlights an overlapping optimal trade entry, emphasizing the importance of dynamic price action. He notes the confluence of the 62% and almost 70.5% Fibonacci retracement levels. Additionally, using a different low, he identifies another overlap around the 79% level, indicating a strong area of confluence.
Breaker Patterns: Bullish and Bearish
The analyst introduces breaker patterns, explaining that a low with sell stops below it, once violated, can become a bullish area upon retracement. Conversely, a high with buy stops above it, once taken out, can become a bearish area upon retracement. He illustrates these patterns with examples, showing how price reacts when returning to these levels.
Applying Breaker Patterns to Market Structure
The analyst emphasizes the importance of incorporating breaker patterns to understand market structure. He acknowledges that identifying these patterns requires practice and provides ways to do so in his tutorials. He shares that the Euro has traded this week according to these principles, serving as a practical example for those familiar with his teachings.
