Under the tag “When theory meets practice” we publish analyses of currency pairs, which we verify after a few days in terms of verifiability, and the basis for verification is a comparison of the current situation with the predicted situation on the analysed instrument. This approach to analysis gives us the opportunity to find the weakness of the strategy and minimize the possibility of making the same error in the future. The analyses are made according to different strategies, so everyone will find something for themselves and there will be an opportunity to assess their effectiveness, eliminate wrong assumptions and apply tuned strategies in their trading.
In the first week of 2020 we only had two trading days, that is why I have only one analysis to verify: “NZDCAD – bearish engulfing on the daily chart” published on 02.01.2020.
I wrote in the analysis so:” “Interestingly, the first session of this year on NZDCAD started. The last day of the past year ended with a large bearish candle covering the previous day creating a bearish engulfing formation. Today, from the morning, the falls continue and the price is already below the mentioned formation, heading to support of the channel. The MACD is “red”, suggests bearishness. On the H4 chart we can predefine the target of sellers. If the market overcomes the channel support, the nearest demand zone starting at 0.8615 may be the first supply target. It is worthwhile to observe price behaviour with on channel support and if it is successfully overcome, join the sellers. “
The attached comparative chart shows that the direction was correctly determined, but the target lacked 10p. The analysis of the situation on the current (Friday’s) chart indicates the possibility of further declines after a possible upward correction in the direction of the recently defeated channel support.
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