Short term trading bias is very important for daily technical analysis purpose

Short term perspective is very important aspect of building a career, In trading words it is known as "Versatility"!

How much importance do we consider to give our bias whether it is performance or whether it is "Directional". Aren't, we thinking of too far ahead and giving away short term profits away with that mindset. Let me tell you giving importance to short term profit strategies giving you much more to earn while momentum is there rather than looking for consolidation patterns like "Triangles" or any other "Chart Patterns".

Market makers hardly look at charts and they look at the chart only to see what crowd is thinking means what bunch of new traders do when there was no big market participation by them. So, It became equally Important to look out for strong "breakouts" and neutral days after strong activity happens on an Intra-day basis, while the overall price action is opposite of that day activity say, Reversal is happening on short Term prospective.

By the way, crowd doesn't necessarily mean lack of money on deposit. It only means that horizon of a trader is relatively small. In most cases, it’s short term traders who are responsible for initiative and liquidation breaks, because they are willing to buy and sell on support and resistance with fibonacci involvement

Value Need to move with price because all support and resistance levels are not important for market participants

What is value in real Terms? Value could be anywhere between a chart. It could be intermediate bracket or the area where price spends most of the day range but it changes all the time, You can see Price consolidation in range in European session and breakout and see another range in American, So that time value has been shifted higher And most of the times when you see such behaviors then there could be liquidation with strong rejections could be the entry points with small risk.

Day activity should be kept in mind and traders look to apply indicators to see value and substitutes are MA or Bollinger Bands, But for me it is only "Prior Behavior" and context which sets values below is the example where you will see that according to bollinger bands applied traders should be selling but if you look at the range price show momentum and after liquidation it keep going higher and value was shift higher.

It occurs because of what I call «Inequality principle»

It claims: «Different price levels are not equally important for the market». Do you feel what I’m talking about? Moving average or Bollinger bands can’t distinguish what price levels are more important for the market – it’s responsibility of a trader. Missing piece is market logic.

But period in the red circle was a final auction, overall trend was rising and market was no longer able to stay inside of a trading range. When market lacks selling liquidity, when nobody is going to sell, it start advertising higher searching for sellers. We often see that price is leaning to higher extremes and holds on higher prices.

How do you think – if auction is in place, can we say that this area is equally important for the market as area from previous day? Obviously, it is not – if selling liquidity is not enough, market loses equilibrium and searches for new area where balance can be found. We may pay too much attention to this area, but Bollinger Bands respects is as any other areas –

If we rely on idea of value from Bollinger Bands, we should sell because «value» is located below price. But in fact, proper calculation should like described below: value should not slowly move up, but it should make fast «gap» and it’s location is going to be somewhere in the center of congestion

As you see, our scenario completely changes when we look at the chart this way. We now should go long, because value is going up!

Totally different scenario which tells us that even though value builds higher but overall trend and <"Context is also important">. In this case Price Breaks the range but with no momentum and we can say least that price test the high of elongated candle but that in trading terms has no . Possible words that describe this is holding the price.!

Range breakout traps are best suited with this example when price broke to the upside and then break to the downside and value again shifting to the lower site with floor finally broken as no panic to buy on the downside candles.

Australian dollar possible the weak after possible Top ?

Australian dollar is on its way to test the important support around 0.9200

*** here is a another update on Australian dollar movement. It is "Range bound" this week and we can possible see a test of high but as far as I am concerned we should be shorting rally now. Reason behind that setup is we have seen no momentum when pair falls and any upside rally lacks momentum

*** As I have earlier mentioned in my posts that when we saw strong patterns which don't get any follow through and buying and selling on support is probably weak holders effect and that is the reason I didn't post that chart but earlier liquidation candle followed by weak buying candles giving us a clue that possible top is in place around 0.9440 area.

*** We always look for the contribution of the strong holders and who are those holders, chart give us clue always. It's hard to spot "big player" but one thing will help you. Address yourself a question - who loses on the market? Who is caught in short or long positions? If you understand that long players are losing, you automatically know that bigger timeframe short player opposes them. Smart money players create imbalance and absorb volumes.

Gold intraday update Looking like possible top around 1332 area ?

Trade finally closed !!

***Strong belief is needed when you start shorting or going against the strong test and when you see such strong behavior at first site and reaction on second then it totally become necessary for you to immediate react to the failures. I would cover my position now at 1313 area

*** Still the imbalance could be here but I am not too much concerned with future price as I always prefer to trade the recent price action and what chart and "Context" telling me to do.

Basic of price action and how it behaves at different phases on an Intra day chart

*** What would you prefer ? Long term trading or short term trading as it is not really matter what you target because its approach that matters a lot and the reason is whatever you prefer should be profitable for you. State of mind and performance pressure really let you put in lot of stress and you keep changing your mind again and again, But price will react the same way which ever method your prefer.

***Many of you are familiar with concepts of «overbought» and «oversold» market. Conventionally, if price is going up and momentum is slowing down, we see signs of overbought market, and, the opposite – when price is going down and momentum is slowing down, we see oversold market.***

Reason I am pointing out these facts because it is the way we always use to approach the market and such overbought/oversold situation occurs only when market is dominated by short-term traders. But let’s first get familiar with concept of domination. What doest it mean, that market is dominated by short-term traders? It does not mean that nobody is there except short-term traders, it means that they are the driving force for the market.

*** By the way, short-term trader does not necessarily mean lack of money on deposit. It only means that horizon of a trader is relatively small. In most cases, it’s short term traders who are responsible for initiative and liquidation breaks. ***

If you we see movement that is going to be highly volatile and starting from inside of the trading range, it’s probably a «cascading effect» - something that is created by «fear of missing out» - many traders are chasing this movement and will lead to fast auction, raising prices higher and higher. In auction market theory it’s called "initiative break", it means that something is happening very quickly, with significant expansion in volatility, and maybe – volumes. But volumes can be not interpreted easily in this case. When volume is increasing (or decreasing) inside of the trading range, this information can be misleading, because there are too many types of traders participating inside of the trading range – from algos to scalpers, and increased volume can be a result of those guys’ over-trading

*** What about "liquidation break"? This is the opposite to "initiative break". It occurs when traders who have been involved in the action (during initiative break) are closing their positions. Usually, volatility is also increasing, traders are scared due to some news announcement or they simply put their stops below similar levels again causing cascading effect. Really, there’s nothing new under the moon – traders often act like a herd, and they rarely try to find their own particular niche and instead do what is comfortable and conventional – say, buying on the moving market and selling on the falling market.

***Now, what if market makes quick break from outside of the range of the day? It is called «responsive break». More often than not, responsive breaks represent activity of other timeframe traders who are building their positions using high prices (of course, short positions). We should take into consideration that other timeframe traders are not too urgent – they don’t want to push price down here and now, they understand that market has opportunity to go down in medium term time perspective and they want to be in this movement, but they are interested to accumulate inventory before the rally, that’s why they are acting upon a good price, but not expecting to get good timing for their trades.