Hi, traders.
In this post I’ve decided to emphasis more on Patterns and Overall context, that I use in my own trading, and that may be useful for you as well. In other words, what do we do step by step when we come to the market with the intention to find a good trade location?
We go top-down, from analysis of bigger time-frames to lower time-frames and finally, tick-by-tick action. Of course, our thinking in calm environment, when we do our homework, is different from thinking when we are acting at the «heat of the moment». But prepared trader has more odds of making good decision rather than unprepared one. The only group of traders that can make absolutely no preparation, are pure scalpers. But now there really a few pure successful scalpers in the world – this trading style has become very tough with the popularity of mechanical trading, HFT algorithms.
But what about if we spot Institutional Activity And we find candles that helps us spotting where stops are placed and we get the demand level protected when Price hit that particular area, specially when candles already has trapped traders.
It is very hard to find such setups but failures are in itself a strong clue of what strong buyers or sellers might be eyeing in such scenarios.
Australian Dollar Trade Update
Trade, I took on Friday of Australian dollar is a short example when you need to react when such scenario happen when we have already seen a demand and Price test the area and even strong buyers enter the market.
First of all, we saw a candlesticks trap a failure attempt by sellers when new high is made and then we see "Three Inside Up" Pattern which tells us that strong buyers are still there in the market.
But Often this type of patterns don't succeed but if you see price was accumulating and every down move found buyers few times and then finally when price test the area with another bearish pattern, Demand was stronger than earlier and may continue when market open or even better price would be offer to buy if price test the area again