Candadian Dollar spike of daily Demand Zone Outlook Bullish

Canadian Dollar spike from the several months low was due to strong demand area as it was the are just above the protection area which is 1.0560. Risk aversion hit the market when Canadian Banks released their monthly Unemployment Data, which tells that unemployment rise during last month and rate went upto 7.1% as market was anticipating no change.

For me It is a strong hint that market has complete the correction or it could be reracement as well but In elongated trends, this type of behavior is very much on the cards and Price go through the 1.0680 supply zone with conviction and strength.

I would really try to take a closer look if that "Supply Zone" is tested again and this cross will be on the priority list to trade.

Take a look at usd/cad Daily Chart below

usd/cad Bounce of strong demand zone Outlook strong bullish

IN this chart there is strong elongated trend followed by strong liquidation but as I mentioned in the blue line which is just above the low of breakout out candle which comes in at 1.0560 "protection Area" and when earlier spike was way above that area and created a strong demand, We should have the clue "How to trade" such scenario when that area is tested again.

I did enter after strong momentum candle spike off the lows and It could be a start of new trend again and that is why always trust and momentum and take one pair at a time specially when it One Time Frame Move (OTF)

Gold Intraday Technical update Rise from strong Demand Area

Gold "Rise from Strong Demand Areas" And When 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’ Overtrading

Gold Intraday Update as it has In strong run since low

Gold Intraday Update Cascading Effect

The idea of posting such is good from Educational point of view and also such activities can get more out of you as a traders because It does make sense to trade logic things and trade what we see rather than what we expect.

Analyzing too many chart at a Time does necessarily means that you are trying to force the issues and try to capture every possible opportunity that can arrive at any time.

But things are different with "Commodities" traders that you don't have to be worried about anything else as there are two or three precious metal to remain focus as compare to "Scan" Multiple "Currencies", Which is impossible.

Supply hit the market Update Australian dollar

AS I mentioned yesterday that we have got another trade location in Australian dollar around 0.9405 Area and that was strong "Violation of rotation center" After "Accumulation", Entry was offered around 0.9410 and I was looking to take my profit around 0.9440-50 area, And After the release of "Australian Employment Report", which was mixed with Unemployment rate rise after decent People were Employed and Market was all set to test the Supply and that area was good enough for us to book the profit as price come back to opening levels of the day.

Updated chart of Australian Dollar

According to my Analysis I always look to find pairs which are trending and have logic to reach or test certain supply demand zone as Price already priced up to behave in such manner.

That is the reason I never look for reversals too early Untill there is clear evidence that trend is mature and look to reverse or correct the earlier trend.

But Australian dollar has spend so much time near the highs, this and got rejected at the trend extremes It will probably correct deeper or reverse, So Now I have maintain my neutral Bias on the pair untill Price take the Highs with conviction and convince me to enter again.

Reason and Logic of trading supply and demand

As I have always mentioned in my previous posts that When you trade Forex currencies then there is strong conviction should be seen in your trades and Most important one in "technical analysis" is trade with logic. "Supply and demand" works together in forex market as there is strong demand coming out on previous reference points and specially when that area is protected.

Few days back I mention that I am long Australian dollar and I have few reasons for that Please check my previous post of Australian dollar here

Check the updated chart of Australian Dollar

Price has reacted the same way as I have mentioned in my earlier post,as that Particular area was strong "Confluence" and price holds the higher prices after breakout as well .

When you have such scenarios, then price usually Gravitates to test the high or the supply areas(In strong or elongated trends), as It has done in that case. Strong selling followed by "accumulation", always tells us the reason why the price has paused and start going sideways and that should be good enough to give us second thought before we go short in such cases.

Specially If there is a breakout and traders often trapped by strong selling and start selling the rallies but logical trading tells you to wait and see before fading such breakouts And If demand level is already protected, then we should trade rotation center violations of false breakout after the daily range breakout to the opposite side.(Also Known as Responsive Breaks)

It is important that you know you strengths and weakness.

Have you thought about this thing – do you consciously understand what is your best niche in trading?

We are all different people. We process information in different ways. The only way to sustain ongoing learning process is to find trading niche that suits your personality.

They say – talent is the key for success. I would say – the key to success is «talent + environment».

To become master trader, you need to process huge amount of information, master all nuances and details of price action before you obtain intuitive skills. This is hard work, but it absolutely doesn’t feel like work if you’re doing something interesting and emotionally rewarding. This occurs when your natural abilities to process information are involved. Our learning curve accelerates significantly if we are operating inside our niche.

I will share with you small check-list that will help you better understand what your trading niche is.

Consider answering simple questions

Do I make tend to make decisions by analyzing data or by «gut feel»?

It’s not even about decision making process in trading, it’s about life in whole. For example, how you decide – what car or computer to purchase? Do you patiently explore feedback from some special internet resources? Or you just follow your impulse and pick what you «feel» is good?

It’s nothing wrong about that. This is how we process information and each of us has dominating style of perception as well as reaction to outside information.

In trading, «gut feelers» will be better at pattern recognition. Price action trading is not a science - from time to time, market creates short-term imbalances and elusive opportunities that can’t be recognized by traditional technical analysis – there’s no way to measure «aggressiveness» of the market or «lack of conviction». Yet people with strong gut feel and intuition can read price action quite effectively. Their learning curve accelerates when they start master some patterns and setups observing nuances and details of limited number of setups.

You can hear from this type of trader: «Here market is strong, here market is weak» - that’s how they view things, they will not be able to explain it. «It’s just obvious» - you will hear from them, after you will ask them to explain their best trades.

Other traders will need research and solid rationale beyond their trading decisions. They will be more capable to deal with building trading systems, measuring and optimizing parameters, dealing with statistics and so on.

For example, I tend to be more «gut feeler» (though I have solid trading approach, once (several years ago) I was trying to master some «mechanical trading systems» under supervision of experienced trader. It was a complete disaster, I’ve done a lot of mistakes, was emotionally sucked out and lost significant amount of money.

It was tough lesson for me – I had to switch back to my preferred trading style and master it. Then, things have become fine.