I had to dig through an entire song of “notes” to find this thread again;)
They musta got their second wind…
We’ve mentioned for the last couple weeks that it remains a [I]buy the dips[/I] stance on these 2 european majors for the time being. There’s been nothing in the make-up of the price action to justify shorting them just yet.
catcher read it about right, back up the page in the first paragraph of his post (#381)
As long as it attracts continued demand (buying the dips) on profit taking, then the near term outlook remains the same.
It swallowed those stops beyond 1.27 at the second time of asking earlier this week, & if the bullish momentum continues to hold up to inspection, it’ll probe for that next likely fulcrum step at 1.31
You only have to look at the behavior & strength of the bars during yesterdays London shift to witness the built up demand lining up beyond 1.27.
It printed 160% of its normal daily activity during yesterdays climb.
I guess it would be understandable if it let a little air out of the tires today given the fact we’re rolling into end of week book squaring, but it’s got the bit between it’s teeth, so who knows.
Take the road of least resistance & continue to go with the flow!
Oh and I been doin’ JUST that:D
Been some great flag setups for buys on those resistance points that I couldn’t turn down. Low risk, high rewards. Ain’t about to look a gifthorse on the mouth;)
Cheers!
I wonder how many folks have had this on their hit list since you last highlighted it back in late June?
It’s been a regular provider of short orders every time price has moved up to the supply zone, & I guess because its cut out a pretty solid channel range going back a couple of months, that has shone a strong spotlight on the 113.25 ceiling?
The only short I managed to get a hold of this week was on Tuesday. I wasn’t around yesterday or earlier today unfortunately, but its still getting rejected every time price winds its way back up there & continuing to justify the risk in betting the short side.
I’m assuming that lower area down around 110.75–111.0 would be the most likely initial test level to watch?
I then have next lower potential demand zones within this range channel at 109.10–109.50 & 107.50?
They look ok to me. Just require price to get its marching boots on & go test them out.
As a value to risk deal, those lower levels are easier on the eye than the current 70% bounce to-ing & fro-ing of the avg range distribution huh? 
It has definitely focused it on the radar, but then that’s the point of the exercise.
All you can do is consistently mark these types of price action levels out & observe the behavior as it vibrates the level.
If it keys off the level & flashes up one of your favored set ups/triggers, offering acceptable risk to value ratios, then you’re ok to play your odds, even if it results in a scratch or loss trade.
That particular pair has certainly offered acceptable odds engaging that level from an intraday perspective.
Using the step levels of the average days range as a guide to cashing out will keep you on the right side of the line should you get a run on your entry.
If you can’t get a decent play on your risk (late entry), or your set-up and/or target to risk ratio is out of balance etc, then leave it be & wait till it rolls around again.
I’m taking that to mean that as long as sufficient room exists for price to cycle towards the next potential supply or demand level from the point of entry, then it’s a viable bet (on the appropriate timeframe).
I’ve identified a couple of levels on one of my watch pairs - audusd, using a 4 hour chart timeframe. I’m assuming those demand levels offer the types of potential activity you’re describing?
Price was shouldered & reacted quite swiftly off .8080 on 3 occasions recently, as it did when it attracted support off .8330 at the beginning of this month.
.8850 has acted as recent supply so if price drops back as far as .8330 to check for demand, I got 5 possible handles of clear air to the top side if I don’t have to pay too much to get long.
The other option being, if it falls & drops through .8330 there are 2 handles of potential profit on the short side & again, as long as I don’t have to pay too heavy a price to check it out, it’s a viable bet?
Yes they do.
Yes, that’s what I mean.
Don’t forget, you’re always in total control of your percentage risk deployment & your entry.
As much as you’re able to identify the next logical stage of the potential move by flagging up these next step s&r destination zones, it’s out of your direct control how far & how fast the price travels.
It might shift 1/3rd or 1/4 of its average range away from your entry before ratcheting back against your position.
The only way you’re able to keep hold of (or improve) the risk/value equation at entry is by actively managing your position, & to a certain degree your choice of timeframe will dictate the intensity of that (initial) management element.
So, if price pops down to the .8500 level, catches a decent bid, threatens & moves thru your upside supply zone at .8850 I take it you’re going to have an action plan already in place to cover that possibility, including the risk/cost/value potential on engaging a long bet?
lol, point taken!!
Always thinking of, & covering, the options 
And it will do unless you specialize.
Pick a favorite or familiar technical zone/level from which to operate.
Ensure your set up & trigger combo offers a realistic chance of achieving positive odds to risk ratio.
Once you get it assembled & in place, don’t deviate from your rules.
That’s where the discipline part comes in!
The trigger is only as good as the operator directing it.
You got a huge flexibility advantage over the bigger operators out there if you can get your act together.
You can dial in & out of these choice intraday positions with half decent size via the low spread/cost platforms.
Most reputable retail shops offer no-requote/no dealer intervention gigs these days according to the blurb, & if you’re disciplined with your entry level criteria, you should have a ball with those types of set ups.
Yeah, you’ve got it.
Sean is referring to legging into minor pullback breaks.
They’re much more visible via the micro view & as long you’re aware of the average range numbers when you’re looking to place your bets into these momentum steps, you won’t get caught offside entering a trade as price approaches it’s maximum range extension for the day.
Off course, the flip side of that is you can decide to take a 1-2-3 reversal or a high-low break if it’s keying off an overshoot of it’s maximum range coverage, especially if that overshoot prints as London/Frankfurt is closing up for the day!
Some of those short or long squeeze plays return decent odds for the risk outlay 
Anyhow, here’s a graphic of what he was talking about.
That 2970 break represents only 30% of today’s average range, so you know it’s got sufficient gas in the tank to cover decent mileage as long as it doesn’t rebound.
Even the 2930 break offers acceptable odds given the importance of today’s rejection zone.
1 minute on the left, 5 minute to the right
Hey crosshairs, have you noticed that trigger play has comfortably banked 3 from 3 during the past week on eurjpy off the much talked about 113.25 level, including yesterdays rejection?
I think I’ll stick that trigger in my entry wallet too 
Your 1st identified level of demand has just come into play during the last couple micro bars.
That zone also represents it’s average range limit for today. Shame it’s tagged it at this time of the day, otherwise you’d maybe have yourself a bit more volume to chase it around with.
So, what are you going be looking at from hereon in?
Maybe it’s not such a bad thing that prices have extended down to cover its average range as Bernanke is testifying to the Senate.
I guess most of this price slip risk aversion is down to the chatter Sean?
If it can hold up here into the Tokyo session & cut out a shallow range, it might open out into a possible 2 way opportunity:
Option 1) a 1-2-3 reversal or a series of momentum breakout steps back toward 113.25
Option 2) a 1-2-3 continuation or series of momentum breakout steps down towards next level demand at 109.10-50.
Oh sure, just the normal anxiety drill.
Prices were easing into the meeting. But then the market was expecting to hear more quantitative talk, so a little slip wasn’t unexpected.
If after digesting the content they don’t like the look of the wording or the Feds forward positioning, then last weeks lows will come into view pretty damned fast.
Good to go then huh!
Whenever it breaks fast (or hard), your highest probability play will always be via the momentum step pullbacks.
Aggressive price action (event risk/short & long squeezes/large stops firing off etc) will also throw up clearly visible trailing stop ledges on your micro charts to pare off your risk & run your profit.
jj nailed it with his “flexibility advantage” comment. If you’re playing the micro view from a disciplined angle, that will be your best buddy!
You’re not the only one. A few folks were salivating into the NY close that’s for sure.
Speed of any further (cross) downside will hang on the defense (or lack of) of Dollar/Yen @ 86.
I’d be more interested to see how it performs second time round. It certainly wasn’t very convincing last week was it!
Short term specs will be circling the wagons if it fails again this time.
Who typically absorbs sell pressure underneath these obvious small consolidation ledges?
I’ve seen you mention that each way stops are regularly parked underneath & atop these clearly visible support & resistance zones, & I’d imagine the strength at which price springs back from probing these stops gives a good indication of the likely defense at these round numbers?
That probably explains why (blind?) breakout strategies so often fail & get faded, & how novices struggle so consistently to read the market correctly from the short term angle.
Would I be correct in assuming that these fast counter punch moves could also qualify as scenario’s condusive to the types of momentum step bets you’ve been highlighting?
Sovereign accounts, CB’s, model type funds, fast money (large speculative) firms.
You got to appreciate there are many different agenda’s at play out there.
Clients will need to realize profits at various steps on the ladder & some funds will be accumulating (buying dips) to get an average stake.
Others will be feeding off the big figure profit taking steps, where they’ll piggyback the expected aggressive move away from a key figure as a short move or a long move gets squeezed.
Russia & Middle East sovereigns are very active in the majors at these key turns, + you got BoJ (& their neighbors) intervention noise cranking out on a more or less regular basis these days – that influences events for a while & takes the heat out of these extended runs to big figure levels. Which is why it often takes a couple knocks on the door before it opens.
Sometimes sure.
But again, as long as you know these levels are likely to be active & unpredictable, you can begin to organize your activity to either get in ahead of the level, or wait for a confirmation signal.
If bids are strong & deep on a move down, (or offers on a move up) then you’re going to witness higher highs & lows (or lower lows & lower highs) building at the micro level as the move attracts bargain hunters & piggybackers.
If it pops & fades, you’ve got a good indication the defense is weak & you might want to start a feeder stake to see how it re-tests that 1st move down to probe for continuation stop orders.
Scared money usually gets shaken out very quickly around these b/o zones. Most folks feed their complete stake into the deal right from the off, instead of phasing or feeding in gradually to test out the genuine intent.
Price pops & springs back seeking out participation, & it freaks out the blind b/o players.
Sometimes it’s just looking for company & it’ll re-test the b/o level.
Other times it probes beyond the level in search of orders & fails to find them in sufficient volume, therefore it fades & dies.
Feeder stakes will get you in & keep you live if the move grows legs. It’ll also get you out safely & cost efficiently if the order book is light in numbers.
Yeah absolutely.
In fact they’re ideal for that type of short range play.
Thanks Danny.
So the entries typical of this sort of counter punch move would reflect the current London opening bets of;
Long thru gbpjpy at 131.77, with 132.70 & 133.20 (the avg days range) in the sights.
Long thru gbpusd at 1.5223, with 1.5320 (the avg days range) in the sights.
I guess once positioned, the decision to add to these bets would depend on how far they ascend/descend on the average daily range scale before stopping for breath & the strength of the bars that reflect the aggressive or passive nature of the move?
I really like the idea & concept of this type of intra-day trading as a secondary model. The risk appears more than acceptable, & its flexible enough not to do too much damage to the head or the account.
Yeah, that’s the kind of deal.
Take another look at jj’s post from yesterday - #402.
Its not rocket science, no fancy kit bag of tools to haul around with you. You’re engaging into the backwind of a momentum shift.
It’s already been mentioned, but be aware of the 60-70% of avg range numbers on your chart. Price stalls & bounces that channel like a magnet, especially on the Pound & Yen (incl cross) pairs.
Price is taking a breather here now @ 1.5270 & 132.45 respectively after the pop up earlier - they represent 65% of the days move off the lows.
Mark it up & observe it over time
Play around with this gig on the sim first & get used to the speed & flow strength etc.
Experiment with a couple combo timeframes to get a feel for it.
The 1-2-3 aspect is straightforward – that’s level/zone dependant, period.
The momentum breaks can be played either way (reversal or continuation), but they’re more successful when you get a pop up in activity that’s influenced & engineered by a definite kick in short-term order flow.
Be aware most of these trips will be relatively short lived. You’ll be required to actively manage them until/or they stretch out into a full blown move.
They’re specific driven moves & not an all day ping-pong day trade ticket.
Something has to happen in order to influence your decision.
Avoid casual entries on the back of insipid or passive activity.
If you try that ploy, it’ll grind you into the dust & play with your head.
No, the example jj posted was of the momentum pullback breaks.
This is what a 1-2-3 reversal looks like off a typically significant zone regularly referred to on here.
Another example of the momentum pullback breaks from catchers post this morning.
The 1st viable opportunity to take it on set up on his highlighted level through 131.77.
That 1st initial move will generally offer the lowest risk/highest probability opportunity.
Price then eases off & pulls back from his pre-identified, potential s&r level into the doldrums of the late London morning activity, before attracting further demand for another push up towards the upside limit of the days range (his 133.20 level), where its run out of gas & eased off into the London close.
Obviously, it’s the individuals choice how many of these potential entries they trigger over & above the initial momentum break, & how they manage the position.
But that’s typically how it’s engineered.
I’ve been catching up with some back posts & came across this one from last week.
In light of Jocelyn’s comments below, did you pre-plan & action the shift up through your upper supply zone at all today?
Looks like lazy shorts were caught napping on the post London lunchtime pop. They’ll be chomping at the bit for those stops up at 90!