In today’s lesson, we are going to demonstrate an example of an H1-15 chart combination trading. The price makes a strong bearish move in the daily chart. Then, it is trapped within two horizontal levels. Next, it makes a bullish breakout and ends up offering an excellent entry. Let us get started.
This is the H1 chart. The chart shows that the price is trapped within two horizontal levels. Upon having a bounce, the price heads towards the North. The buyers are to wait for the price to make a bullish breakout at the level of resistance. Let us proceed to the next chart.
The chart shows that the price heads towards the North and trades above the level of resistance upon making a bullish breakout. The H1-15M chart combination traders are to wait for the price to consolidate and produce a bullish reversal candle to offer them a long entry.
Here it comes. One of the candles comes out as a bearish engulfing candle. However, the next candle comes out as a bullish engulfing candle closing above consolidation resistance. The H1-15M combination traders may flip over to the 15M chart to trigger a long entry.
This is how the 15M chart looks, and it looks very bullish. The buyers are to wait for a bullish candle to close above the last candles to trigger a long entry. As far as the recent price action is concerned, it may not take too long to produce a 15M signal candle.
The chart produces two bearish candles and consolidates. The last candle comes out as a bullish engulfing candle closing well above consolidation resistance. The buyers may trigger a long entry right after the last 15M candle closes by setting a stop-loss order below consolidation support and by a take-profit target with 1R. Let us find out how the trade goes.
The price heads towards the North with good bullish momentum and hits 1R in a hurry too. It keeps going towards the North. It may extend its bullish wave as well. Ideally, the price is to consolidate around the breakout level.
In this example, the price consolidates way above the breakout level. It often happens in the H1 chart. It does not mean that we do not get the opportunity to take an entry. Chart combination trading may help us take entries in such a situation. Once a breakout takes place (H1 chart), we are to wait for the price to consolidate and produce a reversal candle. Then, we are to flip over to the 15M chart and wait for the trend continuation to trigger entry.