Chart read
EXAMPLE/USD (fictional)
Educational only. Not financial advice: nothing here tells you to buy or sell. No guarantee of accuracy. Trading carries a high risk of losing money.
Trend
Price has made a series of higher highs and higher lows, climbing from about 82 to a peak near 108.6. The latest move is a pullback inside that uptrend rather than a clear reversal so far.
Market structure
A sideways range between roughly 94 and 101 broke to the upside, and price then ran to around 108.6. It is now pulling back towards the old range top. The last swing low that keeps the uptrend intact is just under 99.5.
Key levels
Patterns
- Breakout and retest. Price broke out of the 94–101 range and is pulling back towards the breakout area. A retest is not confirmed until price reacts there.
Volume and indicators
Volume rose on the breakout above 101 and has been lighter during the pullback. No other indicators are visible.
Scenarios traders often watch
Support holds
If price holds the 99.5–101 zone and forms a higher low, traders often watch for a move back towards the 108–109 swing high.
A 4H close below 99.5 would break the higher-low structure.
Breakout to new highs
If price closes above 109 on the 4H chart, traders often watch whether 109 then acts as support on a retest.
Falling back below 107 would suggest the breakout failed.
Support gives way
If price closes below 99.5, traders often watch the 94–95 range floor as the next area of interest.
Reclaiming 101 would put price back above the old range top.
Position-size arithmetic
Your rule: risk 1% of £10,000 = £100 per trade.
| Scenario | Level → invalidation | Distance | Size for that risk | Position value |
|---|---|---|---|---|
| Support holds | 102.5 → 98.8 | 3.7 (3.61%) | ≈ 27.03 units | ≈ £2,770.27 |
| Breakout to new highs | 109.4 → 106.8 | 2.6 (2.38%) | ≈ 38.46 units | ≈ £4,207.69 |
| Support gives way | 99.2 → 101.6 | 2.4 (2.42%) | ≈ 41.67 units | ≈ £4,133.33 |
Pure arithmetic: units = risk amount ÷ distance between the level and its invalidation. It assumes the chart is priced in your account currency and ignores fees, spread, slippage, lot or contract sizes and leverage rules. It is not a recommendation to trade.
What would change the picture
- A 4H close below 99.5 (uptrend structure broken)
- A strong close above 109 (new high, trend continuation)
- Pullback volume rising sharply (sellers more active than on the way up)
Note on this read: Fictional example chart drawn for illustration.
Educational analysis only. Not financial advice: nothing here tells you to buy or sell. No guarantee of accuracy. Trading carries a high risk of losing money.