Fresh demand zone ahead, possible retracement, a long opportunity. If it breaks the first demand zone, a quite strong demand area just below.
Stuff to remember:
— First look for significant move, then follow it to its origins where you might find a suitable level to evaluate further
— Make sure the initial move is significant on the same timeframe as the one you use for viewing your candidate level most clearly
— Check the distance that price traveled before the trend ended, longer distances mean larger initial imbalances and improved probabilities in the future
— The strong initial move can contain a few small retracements but not so many that make this move slow and weak
— Avoid opposing levels on the same and immediately higher timeframes, prefer to have a clear road ahead for your trade to run
— Make sure your level is placed correctly (low for Demand, high for Supply) in relation to the big picture's important tops and bottoms
— Trading the first return of price to a valid "fresh" level carries the highest probabilities due to the larger imbalance
— A valid level is considered "fresh" if price has not returned to it since its creation. It has nothing to do with how old the level is
Trade closed: target reached
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Comments
tradingphoenix
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Lower zone worked.... as usual, more orders there.
RyanCox
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@tradewonk I took this trade as well.
But i wondering would this be a fresh area? as it is a reaction from the fresh area from the left.
Why did you not decide to include the area below left into the stoploss.
tradewonk
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@RyanCox, because the big area is very strong, the rally was like a rocket, and when it hit that first test, it's rarely that it just break through.
brettschoenfelder
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Are you considering jumping back in tonight/tomorrow?
I took the lower zone as well. Only squeezed 2:1 out before needing to close Friday. But the chart is telling me this one has a lot of upside potential. I'm leaning towards jumping back in with a stop just above 1.07 (can see new demand zone on 60min)
tradewonk
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@brettschoenfelder, it has upside pontential, but i won't take it now, because the my risk will be to large.
aureliengurne
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Since the LL it made went much lower than expected, do you believe it will still reach the 1.065 area?
tradewonk
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@aureliengurne, i entered on the lowest demand zone, and closed the trade friday at almost 1:3 RR because i don't want to hold it over weekend.
aureliengurne
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@tradewonk, Therefore the prediction you have made will not apply to not week's trading, or it will still follow the direction shown with the arrow going downwards over next week?
tradewonk
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@aureliengurne, I think the price will go highere as i mentioned on the chart, but this weekend there is election that can easily change the direction. I will focus on other strong supply/demand areas in the beginning of the week.