Forex Trading Strategies l Overbought and oversold market conditions Bas...

Australian dollar Update.

First Of all I would like you to take a look at My earlier Post Here

As We can see from the background that we have given so much clues what price does when it reach new extreme and With strong swing it get the attention of "Price Action" traders that we should Buy On "dips", which often is not the case. Market makers don't react the same as we "Retail Traders" expected, they look to eye strong releases and sentiment to trigger the entry.

Although I was Not expecting the price to go that Higher as it would take out stops but after price open up on Monday and that is with Gap and that was good enough to short at another failure at new extreme after strong "bullish engulfing trap"

Take a look at Updated Chart of Australian Dollar

In this chart, I have mentioned few crucial points at where price was expected to reverse and that is the most expected area at "New Extreme" and that is what exactly has happened. And when such activity has happened You just expect large liquidation move without correction and even if it offers correction It would have been offering better entries.

Forex Trading Strategies l Beginners Price Action Based On Supply and De...

Value shifts Supply accumulated and Trend continues

First Of all I would like you to see my earlier Post

Updated chart of Aud/Cad

I mention last week about the chart aud/cad and its momentum after testing the low of 1.0120 and then It continues to shift the momentum higher, Price often reacts strongly when it goes against the strong buyers or strong money.

In this chart we have seen, Possible accumulation and then breakout and Imbalance which carries the momentum through out a day which was neutral day and after than we have seen only momentum candles and Price holding the higher prices. And Now if we again see the shift in Value and Momentum we have some strong protection area with strong background and that is what we should always be eye when market goes against the strong holders.

Usd/chf bids As per background suggests

As I have already stated in my previous posts that the most important thing to read current "Price Action" and which should be a part of "Trading strategy" is the recent price activity or behavior whenever a breakout happens,As when You accept to trade momentum and Fade out moves against the current trend then there are more chances that You develop such "Breakout system" that help you taking crucial decisions at crucial stages.

While I was preparing My this week updates then somebody told me that 1.3115 is extreme support for Eur/usd and It is suggested by leading banks to buy euro for a corrective move towards 1.3270 or 1.3310 probably, But I never take any such action that rely on Support and resistance and price did not give any clue whatsoever to reverse and this type of suggestions never influence my decisions. In reply I recommend to sell euro and If there is any time to sell Euro, then it is now and then next day Euro tumbles 250 Pips. (Suggestion was made on the basis with usd/chf strong Momentum)

Key points that we need to cover In this chart

I miss the great entry in Usd/chf and the reason I set Buy limit because I was looking for test of the value again which never comes and It tells you the upcoming strength of the pair and that exactly what happens. And there is no point in entering in between such strong move because You would ask to cover quickly or set huge stops which is never in trading style.But first spike was small and Entry was offered but Usually such rangebound conditions might have forced me to cover again and added with the momentum again.

While I prepare a checklist of that chart, Then I consider following points

Primary Breakout

Momentum After Breakout

How strong the rejection was (Passive Sellers)

Was there any supply Or Minor development area after neutral days

Most Important Point in this chart is Shift in value and that was the reason why price took so much time in range

when we see primary breakout and almost range bound trading after rejection and then price again hold higher prices or make a new high, Then It is important to line up that pair and see if value shifts again to the downside and behavior of price after breakout of value, and strength of pair should be strong enough to give you excellent continuation setup and that usually happens in strong trends.