Euro Reversal Chart
Hi, It has been quite a while since I have explained the technical portion of How I Pick short to medium term reversals with relation to Background.
Today I picked up a classic Euro reversal chart, Although I pick that chart up yesterday for entry but I was waiting for strong rallies through demand levels as It already happened once but today was the day for me to enjoy the free falling Euro.
As a trader one must show patience to this type of scenarios as there is always short covering in strong downtrends and Once you saw new trend maturing then You must raise your hands and have enough experience to pick your part of profits.
Picking up tops and bottoms rely totally on what background and prior price action telling you and what are crucial levels and How price behaves at those levels as Most of the strong moves faded out quickly if trend is about to resume and ignore those moves quickly.
I never favor going short at top and long at bottom untill I see few failures in the trend prior to recent Price Action. But If you can't buy low and sell high and always wait for a pullback then You must think again what are the chances that you get good risk reward and How you can increase your profit factor, Even If you are making money consistently.
Euro is the most traded currency throughout the world and all the banks have reserves to buy and get a chance to sell at higher prices and supply and demand just give you hint when they looking to sell.
Dollar enjoy the ride against all G10 Currencies today, It often happens with strong trends as we just need a glimpse of triggering and Euro pause was also strong clue that market is expecting too much out of Economic data which did not met the expectations and hence price reverses.
With strong hints of matured trends(one must go through the blog to see How to trade mature trends) we must wait for this type of day when lot of bank officials are due to speak and present their views on economies and give us hints of the things to come in the coming weeks or months as It often resume the earlier strong trends or give us a strong opportunity to trade pullbacks at higher or low prices.
Institutions and banks always obliged and triggered as they always look to sell when they don't see things improving in coming days and that is why avoiding lot of indicators can give you exact entry price as they often react late when trend is finished and has very little to offer and that is why I always look to react at importnat levels.
