I’ve been leafing through the Technical Templates threads & read an interesting twist or option if you like on trading [B]into[/B] levels such as those you’ve mentioned above.
Both 93.07 & 7698 are previous weekly & monthly highs, levels which they’ve highlighted throughout those threads as high priority & ones I was also advised to pay particular attention to when I began trading other instruments.
The interesting twist is that rather than wait for one of these key previous day, week or month levels to react, trade [B]into[/B] them from below (if the momentum is bullish) or above (if the momentum is bearish) via a pullback hook entry so you’re already positioned with reduced risk as the level is approached & traded.
One of these guys will correct me if I’m wrong, but I’m sure I read that one of the reasons for this tactic was due to the potential build up of stop orders laying the other side of these key levels, especially if the level has been traded into & rejected previously?
It certainly makes sense from a risk point of view & from my own experience trading around similar levels, you often experience increased volatility & choppiness as price bounces back & forth until the orders aggregate out. This can result in some frustrating stop-outs if you’re actually entering on & around the level until one side or the other gain control.
I’ve also witnessed some powerful follow through moves once stop orders are triggered on the other side of these levels, which makes this tactic of trading [B]into[/B] a level a potentially attractive & appealing option.