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| GBPCHF M30 |
Just want to share another
Compression example. I was watching the pink line for PA to go short on this one, pity price started free falling before even reaching there. Again notice how sharply it fell? This is because there was no more demand left to stop price. It is important to note that once price has reached the origin of the compression, there is no saying whether it'll continue to fall or rebound. As such it is important to take partial profits or move the stop then. I must say Compression is one of the most well kept secrets in the trading arena, its just amazing why books don't teach this.
Hi Myst, that is a good catch on the bear flag compressing up. Too bad you missed the trade. Where would you have put your profit target? @ 1.4502 level or a little higher?
ReplyDeleteHi Steve,
ReplyDeleteI would have TP 2/3 around 1.452 which is the 30min demand. Yes it has already been spiked a couple of times but until it has been engulfed I would rather be conservative and not sweat on a couple of pips. Besides if price would to break the origin of compression I still have my remaining 1/3 to ride.
Having said that I'm still experimenting with different ways of trade management, am sure there are better ways to do it :)
Seeing how it has played out so far that would have worked. You would have cashed most of it out before it retraced.
ReplyDeleteWhat are your thoughts on the AUDUSD weekly chart? It is sitting on a retest of the Demand level. It has hit this level a few times in the past but each time it has shot away pretty well. Do you think it is running out of steam or can we ride this up one more time?
I don't do touch trades so regarding levels I'll usually wait for PA to tell me whether there is still demand/supply at an unfresh level or not, if I don't get one I'll stay out. I actually noticed Aussie compressing down just now, was really hoping for a fakeout of the previous 0.95926 swing low and a bullish pin. There is bullish divergence too so that would have been nice for at least a scalp. I'm not too sure now anymore, but based on the weekly chart I believe the 0.939ish level is a very obvious S/R flip level which is definitely worth a watch.
DeleteRegarding AUD related pairs I'll keep a close eye on AUDNZD and AUDSGD too, both are compressing down and AUDSGD is near 1.2 BRN. The downward momentum of AUD pairs is very strong though, so I won't mess around and will probably only take a trade if there is a distinctly strong bullish PA bar. Just my 2 cents worth!
Thanks for your analysis. I saw the level and have been waiting for PA to tell me what is going to happen also. I am fairly new to this and often miss some signs so it is great to hear anothers thoughts on it.
DeleteWhat is BRN?
Hey np I'm also relatively new so don't take my word on anything :P Added u on my Google+ maybe we can exchange skype or something to learn and spot setups tog ;)
DeleteBRN is big round number, its a James16 term and is basically numbers like 1.2, 1.25, 1.3 etc (Increment of 500 pips). RN is round number and refers to numbers like 1.21, 1.22, 1.23 (Increment of 100 pips). They're useful because they sometimes act as S/R. Stop hunts often occur around these numbers too because many people tend to put their stops there.
Got it, I hadn't heard of James16 until I read about it on your site. I added you as well. What time zone are you in?
ReplyDelete