The weekly chart shows a lot of orders being filled. Price is falling and we see a Demand Zone below. We look to only short until price gets close to the DZ.
We will be looking for areas of supply on the daily and 4hr charts. One has been drawn in.
We have another area of supply. No supply areas are being seen on the daily which is why none have been shown.
The Supply zone has been hit. You can see how price snaps to the zone like a rubber band. This is because supply has depleted so price must rise to the next area in which sellers are located. This is where they are. The chart is showing you supply and demand imbalances in action. This is all the information we need. To determine where price will fall to we need to check where there has been the least amount to orders being filled. This would be the area marked in pink. TP would be about 80% of the distance.
TP is reached for about 2:1 RR. There are no new areas of supply so we must wait. the recent high I would not class as Supply because its more a pivot (Supply zone should have 3 or more candles) and also a retest of the previous supply zone. Not fresh.
We have another SZ and price has snapped to it. This looks like a good RR trade. The TP area is again where there has been the least amount of orders being filled. Look above the pink area and see how much trading was occurring. but look to the left of the pink area and its empty. This is the TP level.
TP reached for about 4:1 RR.
As I mentioned in the initial post regarding Trend line momentum. We know that we are in a weekly downtrend. We see here that nthe 4hr trend momentum line now has candles closing to the upside. This shows weakness and a sign of retracement to a higher SZ. We already have our SZ marked so this is where we are looking for a continuation down move in price.
The large zone highlighted shows filled orders. Always look left and see what price is telling you. This is a set and forget trade. The pink zone shows the least filled orders. This is where price is likely to go. Nice RR possibility. The SZ I have set rather aggressive. However I do not see a clear SZ above this so although its narrow it looks right.
TP reached. Price fell through the mass of trading to the left. Once you have this kind of mindset the chart becomes clear.
SZ set and hit. Rince and repeat.
TP reached. Here is a good example of why you should set and forget. Price spent 3 days hanging around this SZ and if you were to keep looking at your charts, as price pushes deeper in to the zone most people would exit the trade. You must have trust in your trading and be mechanical.