Eight Hour Chart Forex Challenge Off to a Good Start

Last week I posted a Forex eight hour chart trading challenge for you to take part in. As part of the challenge I recommended trading four pairs, EUR/USD, GBP/USD, AUD/USD and EUR/JPY and looking for 1-3 trades per week.

Two days into the challenge and we already have a successful trade. Yesterday we saw a great long reversal setup on the GBP/USD 8 hour chart. The setup evolved into a 55+ pip trade. The horizontal green line shows the approximate entry and the red line the exit.

Tomorrow I will be sharing my support and resistance areas for EUR/USD, GBP/USD, AUD/USD and EUR/JPY. This should help you in spotting reversals like the one above.

189 comments

Chris

April 11, 2013

the indecision candle doesn’t have a long wick. Isn’t this something you look for?

Cheers.

Rei

April 11, 2013

I spotted this trade also, managed to enter at 1.5265 with a stop at the 200ema of the 4H chart at 1.5223. Could have had a better stop at the swing low in hindsight.

Jan

April 11, 2013

Hi Nick , thanks for posting this nice reversal trade..I set up my 8 charts after you posted your previous article and have a question regarding EUR/JPY possible trade. There was a bullish move and nice hammer on top of the range. Can we consider it as valid signal?
Sorry can’t give you exact level where it happened because I am at work. The set up appeared on next day after you posted your challenge article.
Thank you.

Ross House

April 11, 2013

Great trade Nick! I didn’t trade this one because I wasn’t sure if I could classify that as an indecision candle because its body was pretty long. I did, however, catch a +45 pip trade on AUD/USD back on the 8th after reading the 8hr challenge post.

tommo

April 11, 2013

yeh took this trade.. there have been a few other setups on the 8hr depends on how agressive you are.. all 5 trades have been winners

Dave

April 11, 2013

Like a few others, I saw this trade but did not take it as there was no clearly defined indecision candle (small body, long wick). Can you explain why an ID candle can be as it was in this trade?

Dan

April 11, 2013

For Nick or anyone else…What charting software do you recommend for 8 hr charts? GFT Dealbook is not available now in the US.

Nick

April 11, 2013

Nice work! Glade you got this one too.

Nick

April 11, 2013

Nice work on AU. The trade did not have a wick but in the course I go over different types of set ups. This was traded by guys in the course. Also, another trick is to look at the set up on the 4hr chart. I know this is a 8hr challenge, but you can always switch to a lower time frame to view more detailed price action. On my 4hr this setup showed a long lower wick.

Nick

April 11, 2013

Yes, it depends a lot on how aggressive you are. I am a passive trader so there was only one trade for me.

Nick

April 11, 2013

The trade did not have the lower wick I usually look for but in the price action course I go over different kinds of set ups. This trade was taken by advanced course members primarily.

However, you can always switch to a lower time frame when you see a setup like this. This does not mean you should trade on a lower time frame. However, switching to a lower time frame can give you more detailed price action information. Switching to the 4hr chart for a few seconds would have shown a lower wick. At that point you could have switched back to 8hr and taken the trade.

Nick

April 11, 2013

Please refer to this post for detail info on this challenge and how to access charts.

https://bullrushacademy.com/forex-blog/forex-tips/forex-eight-hour-chart-challenge/

Nick

April 11, 2013

No, that hammer formed just above an area of support. Shorting that hammer would mean you are selling into support which is never a good move. Support areas a full of buyers and as you saw from that move buyers flooded the market.

A general rule of trading is never buy into resistance or sell into support.

Nick

April 11, 2013

This is a copy and paste of what I wrote below:

You are correct, the trade had no lower wick. However, in the price action course I go over a wider varitey of setups. This trade was taken primarily by advanced course members.

This does not mean you cannot take a trade like this yourself. If you suspect a possible reversal you can always drop to a lower time frame to confirm the reversal.

This does not mean you should trade on a lower time frame. However, you can switch a 4hr chart to get more detailed price action information. Once you confirm a reversal you switch back to 8hr and enter the trade.

Switching to the 4hr chart in this case would have show a nice lower wick and would have confirmed the reversal setup.

Sastchimo

April 11, 2013

Unfortunately, this did not last long. The very next candle took out any gains you made with this retracement.

noemi

April 11, 2013

Nick thanks for sharing!! Is this trade set up the three inside up? Always miss it!

Ross House

April 11, 2013

Ah, that’s true about the 4H. I see the set up now.

Nick

April 11, 2013

Not quite sure what you are talking about the trade was closed with full profit. It was clear it would stall at that point as it hit resistance and a similar indecision candle formed…. there was no point staying in the trade. The candle did not take out profits as the trade was closed.

Nick

April 11, 2013

Not sure what a three inside up is?

Neal

April 11, 2013

Looking forward to checking your resistance and support areas on AUS /USD etc I have been trying your reversal strategy for about a week now on a demo account and have had one very good trade it was around 45 pips on the AUS/USD on a 4 hour chart but i have also had a couple that i thought were going to reverse after an indecision candle but then didnt, I stupidly didnt wait for the confirmation candle and dived in I have learnt my lesson. Follow the rules you set out !!

I have seen you trade reversals on trend line bounces after seeing indicision candles and I was looking at at a Andrews Pitch Fork i drew onto the AUS/USD and i was expecting some indicision around one of the median lines which did then occur I was wondering if this is something you do? Or are you strictly looking at support and resistance and keep things simple and effective. Basicaly I am asking if you use any other reversal type strategy. Any way I will keep following your lead and hopefully get a better success rate. Thanks

trading forex

May 4, 2013

Hmmm. That is nice you post this post for our taking part in. But i did not take part in because i did not know properly about EUR/USD. It is some thing helpful for traders. So I need some support to tell me about this field. But its a better effort from your side.