Hey Traders how goes it?

This trade took advantage of recent bullish momentum in favour of the Aussie over the last 48 Hours.
Consolidation Setups are very common across the Forex Market and they generally represent instances of uncertainty about the Medium to Long-Term Outlook for the Pair. The Larger the Setup, the greater the news impact that is needed to start a breakout in favour of one of the currencies. This could be a Jobs Number, Trade Balance, Interest Rate/Central Bank Decision or the outcome of an Election.

Instead of waiting until the breakout takes place - which could take place months down the road- we can take advantage of these Profitable Setups by trading within them. Once we identify which time frame is controlling the Setup - Daily or 4 Hour for Swing Traders - then we simply wait for the correct signal and trade.

This was essentially the basis for the trade that took place on the AUD NZD.


DAILY CHART

This Chart showed the market was continuing a Rally at Support of its Pennant Setup and was headed to Resistance.







CANDLESTICK ENTRY SIGNALS

Many Setups like these require either the Daily or the 4 Hour Chart to give the "OK" to start trading. The bigger the Setup, the more likely it is the Daily Chart´s Signal is first required.

After getting the green light from the Daily Chart, I then went down to the 4 Hour Chart to look for a Setup.

As you can see, the pair eventually formed a small Pennant that was broken with a strong Bull Candle, indicating continuation of move to Resistance.


4 HOUR CHART






After just 4 Hours, trade was closed for a 47 Pip Gain as the pair hit the Resistance Target of the Daily Pennant.

Since it is possible that the Pair could reverse and take us back to Support, we have to wait for confirmation from the Daily Chart as to what it will eventually do.


SUMMARY AND VIDEO ANALYSIS


This was a great example of how we can take advantage of these setups in this Trader Contest. Many of the AUSSIE Crosses have formed Consolidations Setups and once we spot the start of strong movements within their Boundaries or to start a breakout, we can take advantage of them.


KEY ASPECTS

1. CORRECTLY IDENTIFYING CONSOLIDATIONS SETUPS

2. PATIENTLY WAITING FOR THE DAILY CHART TO START THE MOVE

3. USING THE 4 HOUR CHART FOR ENTRY AND STOP LOSS PLACEMENT.

4. EXITING TRADES FOR A GOOD PROFIT WITHOUT BEING GREEDY!
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