SO, for my journal right now, I’ve been thinking about how I was so sure about the
movment the the eur/usd for 2-3 swing out during the euro session of nov 14th-nov-15th,
which for me was monday evening, tuesday morning… and right now, during todays session
I really have no idea, except that i want to push short around 1.3430, and short around
1.3550, and short from somewhere around 1.3600-1.3660
I know well enough that if i’m not sure about the next swing or two (like now)…don’t trade.
However, I am trying to figure out what exactly I saw 2 trading days ago that enabled me
to read the market like a book that day, when today, i feel as if I only am able to
understand a few specific chapters, if indeed I am able to turn to those specific chapters
tonight.
So, with that being said… I noticed one of the things I saw was we had bounced up on
nov 10th and 11th, without really coming into any substantial daily demand zone.
Then, we came into a substantial daily supply zone on Friday, Nov 11th. Then, on market open
this week we sold off strong on sunday/monday. And although we came into what was technically a
"fresh daily demand level", It was a weaker level IMO…because price was really still
moving down to significant size… around 1.3360, which is the next really solid
daily demand zone.
Also, the weekly candle chart indicated that we were selling off from a weekly supply
zone, but not yet into the top of the weekly demand zone, which started around 1.3520
With this being the case…we were essentially “between size” on the weekly, and even
on the daily.
Also, the market had sold off strong…and just hovered, but not rebounded. When a
fresh selloff begins from what was recently a decent move up from about 1.3500 to 1.3800,
it is common for the first stalling point to not generate much of a bounce… due to
so many players covering longs when a move FIRST reverses.
I think knowing that this was the BEGINNING of a move down gave me the confidence to know
that the move down would very very likely continue from that point… and not just a
little ways…but a long ways.
Furthermore, I knew when london was opening…that the current price of eur/usd which was
at a low would not be a price that major players would want to start selling off at.
so, they would push up at least a little higher to trap some shorts and stop them out,
using their stops as the fill orders for the larger players reversal from the long buyup…to
a net short position.
Ok. there it is. Based on being high on the absolute supply demand curve, and price
action from the previous 30 hours lead me to believe that price was not only moving lower,
but was just START to move lower. So I was VERY CONFIDENT on a further down move.
but being so low at the london open, and knowing how institutional traders look for liquidity
and the best fills possible, I knew a push up was likley, only to reverse, and push lower
into what became later a demand zone…which I took a long trade then, and made a profit.
Tonight, we have sold off more, but haven’t had much of a bounce. we are much closer
to the larger term, more important demand zones, and, price yesterday was almost an
inside bar… which hits at market indescision, and the LACK OF clear directional intentions
for today.
Wow…this journaling stuff really works! I was really wondering how I knew so well two
london session ago…when today…i have no idea which way we’ll end up going, or even
which way we will go first.
Ok. it comes down to candlestick reading on the daily chart…sentiment bias…
and being high on the sup/dem curve…as well as having good distance below to find any
really significant demand… and last but not least, having shorter term price NOT bounce
off the first strong move down…usually indicating a lot more of that move down
to come.
Jay
