I wanted to get the feedback of fellow traders new and experienced on the way they take reversals and continuation in confluence zones in trending markets between 5m-4 hour charts. In the spot fx market.
I understand that continuations make up 65-70% of developed market patterns and reversals make up 30-35%.
To my understanding for price action to make a continuation it usually stabs through the Support/Resistance zone or a momentum candle then pullbacks, which may been seen in lower timeframes for it to hold to make a continuation. Reversals usually make a pin bar reversal signal at a major structure level or between 38.2 - 78.6% fib level at times a double pin bar. I also seen at times price hugging the S&R lines especially in the Asian session coming into Europe for price to pullback and breakout only for it to fake out and then breakdown or a true breakout after a false breakout. Also, price tends to have a control point at 00 numbers with it either poking through and reversing or blasting through and continuing.
What's your experience been like? Please stick to the topic.
I try to watch for trendlines to intersect with significant S/R such as daily/weekly pivots/opens/h's/l's, recent swing highs and lows and fib retracement levels. when one or more of these levels is in confluence with a trendline, ill usually wait for the price to touch the trendline then zoom in to 1 minute and look for some sort reversal pattern such as head and shoulders, or triple top/bottom, doube top/bottom, and a couple others that i watch for. i find that trying to predict which horizontal support and resistance will hold, even when there are several levels at the same price, much more difficult than reversals and breakouts involving trendlines
Fantastic info thanks.
Do you find that the 1 min chart gives you valid signals for those longer timeframes? e.g a breakout pullback continuation or a bounced reversal than say waiting for patterns developing on a 5 or 15 min chart when the majority of the move could be over in high volatile times of the day especially shortly after London and New York?
do you feel if the pullback is more than 50% of the drive/momenum candle signs a false break/continuation?