I'll be scouring the charts for "actionable masterpieces". These will be signficant chart patterns or set-ups that I feel are not only tradeable, but also have a high probability of making big profits with little risk. Whenever I spot an "actionable masterpiece", I will post an annotated chart (my chart art) along with an explanation. My goal is to help you learn how to spot these low ocurring but highly profitable "actionable masterpieces" yourself.
Sell AUD/USD
This pair looks like it will try and retest a major resistance level at 8500. While price has recently made a higher high, the oscillator has not, hinting of another potential short-term correction. AUD/USD has been on a strong uptrend lately due to the return of the carry trade. I've been hesitant to short this sucker but if there was a time to test the waters, it would be at a major resistance area like the 8500 level.
This 1-hour chart is showing a nice example of bearish divergence. Look at how price has made moved steadily upward forming higher highs, while the oscillator is declining forming lower highs.
I'd look to short here but I want to minimize my risk and look to enter on a "stop-hunting" spike at 8500. My stop loss (SL) will be 8550. My profit target (PT) will be 8350.
Short AUD/USD @ 8500 | SL: 8550 | PT: 8350
