The price action and order flow dynamics gave a few interesting setups which fit in with my favoured approach towards trading the markets. You can see another article on Forex round numbers here. This has given a recent reference point indicating that the market may have order flow in place around the 1. We then zoom out and see that the second chart below shows the EURUSD on a weekly timeframe chart — this clearly shows that 1. So back to today; price found initial resistance and retraced around 20 pips after hitting 1.
Aggressive touch traders may nave seen this as an opportunity to short knowing that price had rallied around 80 pips since yesterdays low and was hitting lower and higher timeframe resistance.
A bearish engulfing candle was formed after the initial hit on the big round number. Price then dropped around 25 pips after moving below the bearish engulfing low triggering the break ; price action traders may have seen this as a confirmed entry to short the EURUSD with a stop loss above the 1.
The above is of course highly discretionary but the scope was there to potentially adopt either of the above trading strategy approaches. With the above in mind many market participants would have been looking for a scenario giving continued downside. At this stage the euro found strength and rallied hard into the big round number. A simple break above the morning range highs around London Open will often result in a high momentum breakout but the setup today had much more going for it.
As ever, please note that none of the above constitutes trading advice; this article is intended as market commentary only. This is something you may want to test yourself and paper trade to see if it complements your existing approach.
As ever, this is not a … Continue Reading. Harmonic Patterns Harmonic price pattern traders use Fibonacci numbers and geometry to define potential pivot areas. In this article we will look at some harmonic price pattern examples and how … Continue Reading. Our ability to deal with these challenging emotions can have an impact on our bottom line.
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Harmonic Patterns For Forex Trading Harmonic Patterns Harmonic price pattern traders use Fibonacci numbers and geometry to define potential pivot areas. The harmonic patterns allow traders to identify a logical area to put the stop-loss - and th… Read More. Our abili… Read More. And this is exactly what transpired as the breakout took place. This also gives a good example of why traders need to keep an open mind, especially on the intra-day basis when the trend can turn on a dime.
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