Trading supply and demand approach and Reaction at Crucial tests

It has been a treat to keep updating the blogs and thanks for the requests at youtube channels and also in emails . This post is all about how we manage to trade higher time frames tests and approach. As you all know Price is Fractal and We all look for historical monthly and weekly charts to better analyze our trade entries and look for better areas to put our stops and maximize our profit targets. But Indeed, If you every know what is market is about to do or react you don't really need to use stops at all or even few pips even at higher time frames because market set pending orders during test at pin point levels and It could be psychological tests barrier like 50,00 or it could be at strong supply tests.

It is a fact that during the free fall or news price did not manage to collect all the orders that it need so that is why sometime we see facts that market recover in seconds when news is released and price start to cover.

What happen in such Cases, Price recovered and test the origin of the fall and see If market reacts to it or If price has engulf the crucial support or demand we do really see a reaction when it gets to the origin of the move.

I was asked same question several times about one of my video post at youtube channel and It has really forced me to come up with a solution which is easily understood and help you manage and decide your trades accordingly.

Some pairs rise after consumption of supply immediately and fall after there is no buyers left and all the demand buckets gets filled or you have seen enough evidence of Distribution Phase or few traps after the completion of distribution phase. As these levels are easy to spot when a uptrend collapse and hints us the end of phase.

But Currency trading is somewhat different from Stocks and Indexes as there are trends does seems to stay there forever till they are finally signs of reversal seen on monthly and higher time frames and the above example is just a an small example that long term downtrend is about to resume and it can also called "redistribution", and in the example shown above is simple approach of supply and rejection and rise to "QM level", when price engulfs the demand and approach the supply again.

Then what you need to do while see such scenario set pending orders and set stops because market is going to test the next decision point if found pending orders on those areas.

How to separate Frustration and Emotions from your trading.

We all learn several techniques as a Trader, even we use same in stock, commodity and Forex or Future market, and those strategies have been used by traders since the inception of Trading, but why then they have been so successful and why we are not and the shocking answer is Frustration which brings emotions in trading that really destroy every mindset or change it for a while. Frustration can really of several type as not understanding the market price action or poorly time trade without knowing the result or reward of that trade making mistakes which could easily be avoided. Reason of raising this matter is the case that has happened to me just recently where I was stopped twice of my pound sterling trade and succeed only once but that does not patter. IF we buy and sell at the same place then It really frustrate your mind as all those several years spend in trading can really be of no use.

Pound bulls attack 1.4661 Crucial Turning pont

Situation has completely changed in Pound dollar after I post yesterday that pound will look or a decline from 14580 but It has mange to break it with ease and manage to go close 1.4661 which is clear defining point between bulls and bears. But I would put on my bet on the bull side for a ride towards 1.5035, no matter what happens to Fed and BOE.

Could be the case of buy stops and sell stops stack orders

IF you watch the chart posted carefully above, then you can probably see that If price has managed to give sellers and buyers both any chance to dominate and When It is the case price is trying to consume all the supply to buy at best of the price, and If that is the case then price probably will become volatile and all the bulls and new cash flow will be punched into the market.

Pound Rise due to Brexit postive Report but headwinds Ahead of FOMC

We saw pound sideways movement through this Month of May after expecting Price to move ahead but it got trap in ranges till Today Brexit Poll Report shows Remain leads to 55/45, really pumps Pound bulls and pound Rise to as more than 150 pips from the daily lows and "Do We need to use our brains to know the Situation that why that move happened ahead of FOMC Report", may be We don't really are too serious about the unexpected even but that is seen on chart. Price Was due to bounce from lows and create new high and let trader guessing ahead of FOMC report.

If market manage to gather or pick all the buy orders in that move which took place after the Release of Employment and Earning Index From Britain, then this could be a biggest trap ahead of FOMC meeting. I can see a Trap waiting and FOMC Report has to be published with 6 hours from now, but Really maintain and staying above that breakout will really put lot of doubt in traders mind that consolidation breakout is looking quite bullish and positive data supporting that move and there is no chance of reversal. But You need to stay ahead and see who is in control, Bears can dominate and take the benefit of squeezing all buy orders and sell at the best price.

Buy orders squeeze in Gbp Ahead of FOMC Report

> This Article might change the way you approach forex market completely. I will update the Article before the release of FOMC report to let you take benefit of this report.

How to select Currency Pairs to trade Trending Or Sideways

Since I have start trading Forex, It took me while to understand which pairs should I line up for the next week. So, I decided to target News calendar for that Purpose and see which Currency Pair has high impact releases to be Scheduled next week and then I decided to take with the trend entries only and upcoming reports should match with trend entry. But that did not work for me in the long run as I struggle to find out the reason why currency pairs reverse even after strong data in favor. Strong Release does move pairs but If that release brings risk aversion, then It can reverse totally, but Chart should be decisive enough for us to make crucial decision at such events.

Well, It is quite clear that only few major pairs dominate the market volume as it is prime choice of bunch of traders, and every strategy you built in may not suit every currency pair, because few currency pairs offer strong movements and volatility, they still might not be best one to trade at particular scenarios, specially at the time of release. Australian Dollar, Canadian Dollar, Eurodollar, Pound dollar and Dollar Yen are prefferrable choice for every trader to look for their profits but still there might be few correlated pairs that you can use to hedge positions but still You does need to see enough reason to trade the rest of the currency pairs that offer movement and are trending as well.

There are so many factors that influence the movement of a Currency Pairs event after positive data release that should offer strength and good enough to buy but still it moves lower and trade has to be close due to loss. Its a trader's responsibility to track which currency pair is dominating e.g Dollar has been dominate against pound since last year or so and When You expect couple of news can drive sterling higher or reverse the trade, then You should built several strategy that offer entries in trending market.

Let's be more decisive with the chart to clear Doubts raising in your mind

Pound Policy Statement and Inflation Report

These two reports were the highlights of previous week as Pound was moving sideways for extended period in expectation of this release and as You see in daily chart pair has already reverse and that bearish movement was quite significant and one should always look for short entries If trend start to reverse of a new high.

Let’s take the above scenario from another perspective:-

There is another perspective that You can take it from above example as you expect British pound to increase in Value, so you want to buy pound. But instead of just look to buy pound against the dollar, you search for the most suited pair to do it with. And after bit of search you find that Australian dollar has been the extremely weaker of all the currency pairs, and you decide that you will buy Strong Pound against Weak Australian Dollar and this works well If you would have been able to do that because it was weakest pair of all on that day.

That's How I find Trending Currency Pairs with Logic and timing

In the example above, you might have get the idea How banks target different currency pairs at different scenarios and How just a big of understanding of the logic and overall context can offer you sense to buy best currency pairs in the trending market even with weak reports which is unexpected scenario but still quite profitable one if you manage to use bit of research and choose optimal currency pair.