On a move that's a sharp as this, I'd cool off for a bit and look at another pair. But with the move up to the Buying Climax being smacked down by an equal move, I'd have a "higher" Automatic support. (Automatic Range follows a Selling Climax, Auto-Support following buying climax).
Originally Posted by danzka
Thank you Jalapeno, this is my understanding please correct me if I'm wrong,
the first arrow is Buy Climax, the second is Auto Reaction, and the third is Secondary Test
Quick heads up Danzka, the AR is the first sign of the opposing volume. So if we see climatic volume on an up move, followed by the bearish reaction, we look for the first level of demand to be the AR.
One thing I did a lot when I first started learning, and still do to this day, is watch Pete's videos while you follow along on your charts.
sorry for this quick post as new to this thread,what is the abbreviation "AR" short for ,cheers for any answer.
Euro slowly rising into Fib Zone, leading to highest volume of the day/bearish reaction.
The background to me looks bearish as the lower prices aren't bringing as much demand as the rallies bring supply.
The Fib Zone also runs into the upper region of the downward channel and the 50 EMA, adding some nice confluence.
The 5 Min showed the highest volume bar producing a bearish reaction, along with a couple different entries.
What's wrong with this trade:
1. I feel that even though the 1 hour showed the high volume + reaction at 15:00 GMT, it's still pretty close to 16GMT. This is when activity begins to die down and you can see that lack of activity on the 5 Min chart I posted. On the Fake Break, I would have liked to see higher volume, indicating supply stepping in at those high prices.
Thankfully, this trade isn't going against the overall trend.
EDIT: Strange. For 19GMT, the volume that appeared was relatively high. It's abnormal to say the least, but regardless, it pushed prices past the level I thought would hold.