Just wanted to share this, is one of the hair-brain theories I’m working on… But could help to discern where price is headed or use in setting profit targets. This is related to gaps and showed up yesterday in AUD…
So my theory is, price gaps (either straight out Monday morning gaps or large spikes in price) leaves “voids” in the market that can be filled. This helps when we get a spike down on high volume, that it will atleast be filled (upwards) allowing us to get to break even or further profit.
Anyway, here’s the Aussie and it’s gaps that were filled:
Ouch, you sold right into an hourly 61.8 where prices tend to reverse, which in this case it was bound to since we were nearing the end of redistribution on the 5 minute chart. Try going back and labeling the obvious phases of the market so that doesn’t happen to you again.
Well, why don’t we add to the thread by starting up an ongoing conversation about the state of EU, with screenshots.
Then it will provide a storyline for people (myself included) to follow along and learn. I’ll try to provide some lovely screenshots showing MTF and people can add their opinions and questions!
Ok so here’s the first one, I hope people are onboard with this idea, I know it’d be a great learning tool for myself. This is just H1 and H4 but I can go in and take some M5s of areas of interest at some point… or possibly live during the day. I’ve annotated some areas of potential interest to make explanations easier.
If the thumbs are a bit small, I might find somewhere to upload them.
Well, why don’t we add to the thread by starting up an ongoing conversation about the state of EU, with screenshots.
Then it will provide a storyline for people (myself included) to follow along and learn. I’ll try to provide some lovely screenshots showing MTF and people can add their opinions and questions!
Ok so here’s the first one, I hope people are onboard with this idea, I know it’d be a great learning tool for myself. This is just H1 and H4 but I can go in and take some M5s of areas of interest at some point… or possibly live during the day. I’ve annotated some areas of potential interest to make explanations easier.
If the thumbs are a bit small, I might find somewhere to upload them.
My observations on this are that throughout this trading range volume is fairly consistent. I find it hard to tell if it’s accumulation or distribution but, price seems to move up quicker and on higher volume during the day, and retraces on lower volume at night so I’m thinking it’s an accumulation phase.
At point E there is a lovely example of price retracing to a fib zone before exploding out of it.
Point F shows a less fierce reaction than point A which makes me think supply is drying up and we may soon see a break above this area.
I like this idea, let’s use the Euro as a bit of a case study. I like the daily TF to see where price is at in relation to overall S&R and to form my bias. At the close of each week I check the weeklies to see if anything’s changed or we’ve had a major reversal pattern.
Here’s my Daily, w/ Supply & Demand zones marked up. Price has made a higher low on an engulfing candle last (?) week. The weekly candles are on the far right, last week was a nice piercing pattern. My expectation for Euro is higher as marked in blue.
We didn’t run the highs yesterday, and didn’t get the big climactic volume flush at the top so my bias is long on a retracement. For me I usually trade the USD retracement (long or short) during Asia, with the big swing postiion at London.
Have for the 50/61.8 fib marked & I like the 70.5 also (normally lines up with the very low when price fakes below the 61.8
Also a couple of other lines and a bit of a gap. The thing that annoys me (often!) is when we don’t get the full fib retrace
From my perspective, the EU daily chart is telling me we’re simply at an inflection point. If we break through the 61.8, we can test the highs, starting a decent trend. Assuming we haven’t seen climactic buying at the lows, exceptions should be that the trend will continue lower. If I had to choose a bias, I say short due to trend. Regardless, I can trade off the 1 hour trend assuming we’ve seen a confirmed 2 candle setup against trend or valid entry w/ trend.
Last Friday, it seems as if there was profit taking as price topped out but there could have also been supply entering the market. EU has fallen to start the week w/ no heavy volume coming in from the Demand side to be weary of price breaking through the highs. The recent test at the highs had the highest volume of the week, and momentarily stagnated price.
I’d be on the lookout for supply to come in as price retests the resistance zone. If price breaks out and forms a resistance turned support, I’d expect price to initially creep slowly through the recent highs on low to medium volume.
The entry you’re pointing out is about 10 minutes before high impact news for GBP. I try to avoid entering then. After the news and double bottom I got in. Putting that aside, I allow for a double bottom fake break on my stop as I always say. It looks like it would have been fine. I set multiple TPs that were hit.
