I have mentioned the concept of "Protection Area", As there are so many traders wonders that whether a particular breakout will succeed or will faded away, In this extended post I would like to mention the concept of "Imbalance" and "protection area", in one example. Price built up momentum early and when there are market run away from those prices, then market reject the prices from level below and that is why there are strong chances, that those areas are protected by Intra-day traders.
As, In any cases it become difficult to look for entry specially when price went back and forth on a neutral day after breakouts, so I always look for rejection point rather than momentum candles, Because momentum candles do carry wider stops, but rejection candles really don't have to risk too much and reward is always "hotspot area" or upper boundary of price action.
gbp/usd protection area Intraday update Gbp/usd technical update with low risk reward entry
IN this chart, I have cleared most of the doubts that happens to be in mind of an intra-day trader,with above mentioned example as there price was protecting levels and then we saw strong momentum coming off from that area and we had to use wider stops but then we have rejection candles off that 1.7003 (Low was 1.7005) as the entry came in at 1.7019 and the risk was 16 pips and that risk was covered with the reward at the end of the day which was 19-20 pips.
As a technical trader, we should look to wind up the positions at the weekend and look to enter at the start of the week again if price offers such entry levels again.
