Top Down Technical Analysis Forex Strategies

What's up everybody it's Johan here fromTrading Walk and I want to show you this top-down analysis of GBP/JPY We had some very nice trades heretrading GBP/JPY and I'm going to show you the process on how you can use FXMaster Code doing a top-down analysis to really find the highest probabilitytrades and trade more accurately and profitably this year so looking at thischart here what I saw was this kind of consolidation here and we basically havea low here and this low is not broken and usually what I see especially in theForex market is we do this kind of shakeout moves we have one here so yousee that this doji candle right here the low of that candle and the candle hereis the low of this candle is lower than this one but just a tail of it so it'sjust shaking out the stops below this doji here and then immediately reversingand turning back up so this low here gives me a kind of feeling that we mightcome and test this low and this could mean that we break through it and thenretest from below so support becomes resistance or that we just shake outbelow the level and then immediately reverse back up again and continue upbecause you see here we have this higher high and higher low higher high andpossibly a higher low now so this is the current higher lows so we might see thatkind of move and if we look at the four hour chart so the low I talked about isover to the left here and we have these more recent lows here you see this canmove right here in this low that we had a low here and then this low here we came below this level and immediately turned back up youhad a double bottom here so and you see from that we rally and you see this tophere as well the high of the top and this one we just take out the stoplosses above here and then immediately turn back to the most recent level andthat's why one of the strategies I talk about in my Candlestick Profits book isone that take advantage of this and really spots this kind of double topand double bottom formation using specific rules and specific candles soyou need to be aware of double tops and taking out stop losses above recent highsand below recent lows but let's get back to FX Master Code and the analysis behindthe recent trades here so basically on the four hour short here we see that wehave this low here and that low becomes resistance so when I looked at this whenwe got back above this level I started looking at the buy signals on the lowertimeframes because I knew that the probability was high that wewould come back up again to the most recent high which was thisdouble top here and then we saw a resistance at the top and then weretraced and like I talked about in my previous videos if we draw a Fibonaccihere you will see that this is our 50% level right at that 50% level bullishengulfing candle strong candlestick formation which I was talk about in myCandlestick Profits book and from that we turn in just two candles we hit thefirst profit target and then the second profit target when trading fibonacchiare like the 100% as the first profit target the 127.

2% as the secondprofit target and the 161.

8% as the third profit target anddepending on the strength of the trend and higher time frame analysis aswe do right here depending on how much confluence I have the more aggressive Ican be and take the longer profit target but if I'm more conservative I willtake the smaller profit target just to give you an idea on how to use a Fibonacci sowe knew we have both the resistance level here and when you we have the Fibonaccithe second profit target so this immediately makes this a strongresistance level so how do you act on this well we wait for price action toshow us if this is a good level to possibly start thinking of taking shorttrades so after we saw the strong price action when we immediately turn backabout this support level and we traded by signals here and we treated bysignals after the Fibonacci 50% touch and up to the second take profits we nowwant to wait for price actions that show us that this is a resistance level andwe get that here so when I started to see that this was going to turn I lookedfor sell signals and we can see if we zoom down to a H1 chart we can seethat we this is the level I talked about so we come up to that level we get abearish engulfing you could have entered this and just place your stop-loss above this but know that this risk for the possible double top and the shakeout but we came down from that level made a lower low and then a lower high and nowa lower low again so as soon as I basically saw the lower low and thenyou have this kind of micro flag here when I saw the lower low here I knewthat I could take short trades the way down here though just to give you anidea how long you can look at short signals if we just draw a Fibonacci fromhere you see also we touch the 23.

6% resistance and if it's from that levelwe basically turn and we hit the second take profit target again so basicallyfrom the 50% to the 100% that's usually very strong probability fortaking the short rates and then a little bit lower probability betweenthe 100% and the 127.

2% and then of course possible short signals here would not be as good so after we hit the second take profittarget we can wait for a retrace because we now have the the newFibonacci so we can draw a new Fibonacci here and if we draw that one from thelost swing high to the swing low so basically from the last one here downhere so basically after we had the touch of this I can take profit and we knewthat the possible short signals here would not be as accurate so what wecould do then is just sit on our hands basically and wait for new highprobability setups and when we see the bearish candlestick formation hereright at the 50% when we have a bearish Fibonacci drawn and we come down belowthe 50% and as I've talked about in the previous example from from the Fibonaccihere so when we come below the 50% between 50% and 100% this is like the thegolden zone or what you want to call it like this is where you will have thehighest probability trading the FX Master Code signals on the lower timeframe and I will show you the signals just in a minute here but when we makethis bearish candlestick formation and we're below 50% this is the high profitzone and then you have this it's also a high profit zone but then when we come down to the 127.

2% level this is where the probability is not as high anymore so looking now at the 15-minute chart Iwant to show you how you use this signal especially when you use Forex and you dothis kind of top-down analysis so like from the low here which we draw aFibonacci and we see we had these wins nice sell signals here beautiful likethis FX Master Code works on Forex just as well as it works on Binary Option and you have this beautiful signals here and as I've talked about since thiswas the 127.

2% level from the last swing that the accuracy would not be asgood down here and as you see here these two lost signals you could probably havescalped the first one made some profit but the second one would probably havebeen a loss if you would have trade them but like I said if you done yourhomework and done this kind of analysis you would not have taken these tradesyou didn't know that there was a high probability we would get this kind ofswing here and then you have this buy signal here like it's it's a perfectsignal it's the first signal from the low we made in our analysis so youcouldn't made a very nice profit from this move and you could have hold it allthe way up to the 50% as well so this would also made a very nice trade aswell and now when you had this price action here at the 50% you see thestrong bearish price move you would ignore this one of course and you wouldact on these sell signals and you see just how accurate these are and as wesaw here when we come down to the 127.

2% level this is where we don't want to take trades anymore just as the previous example this is where we willwait for the new opportunity so we had the smart money traded here and you cansee we had this buy single here so you can trade this buy signal now and expectthe move up to the 50% and now I would like to see us move up to the 50% andlook at the 50% when we come up to that level do you have bearish price action and if price come back below the 50% level Iwant to start trading sell signals down to the first profit target the 100% and then the second take profit target 127.

2% guys I hope this helps if you enjoyed this video please leave a likeand subscribe to my channel and hit the notifications bell so you get updatedwhen I release new videos and if you want to try FX Master Codecheck link in the description and I look forward to hearing about yourresults and if you use it like I showed in this video I mean you can see that thisactually works and if you have any questions let me know in the comments and I'll get back to you.