Hi all,
I was hoping if someone could shed some light on the following:
Lets say I am swing trading on a 4H chart a bounce in a range or a bounce of a “support become resistance” level in an uptrend using a limit order (and this is how I trade in fact).
Lets assume I have identified a trading opportunity on a pair that has the majority of its directional moves during European session (EURGBP for example). If my limit order is activated during the European session and there are at least a couple of hours left until the end of it, by the time the European session ends there is a fair chance that I will be either (a) stopped out or (b) well in profit but target not yet reached. If scenario (a) happens then fair play, if scenario (b) happens then I am comfortable to leave the trade open for the night.
However, a lot of the time these limit orders on the European pairs such as EURGBP will be activated during NY session or even Tokyo session and if that happens normally you do not see a strong reaction of the S/R levels on these pairs during these sessions, typically there will be small bounces of the level but no significant movement towards your preferred direction.
In terms of market participants and order flow, does the probability of such trade go down? Who is there to protect the level during the least active session?
I have had this situation a lot on US indices, where my order is activated before the US stock market opens (when there is little movement on US indices) and price is just not going anywhere, just bouncing slightly off the level…