Its interesting to see how certain bias's can creep up on you while trading.
If you'll remember yesterday I published 2 ideas on CHFJPY. Originally, I was under the impression that the market would drop as soon as it touched resistance and reverse down to the bottom of the Daily channel where we would have set our original Target. Then, Price broke through the resistance line indicating that the market was ready for bullish momentum. However, I did bring up the possibility of this being a false breakout and as we waited for the bullish pullback to go long on the trade, price tanked. The price is sitting roughly 50 Pips away from the Daily resistance with a good couple of bearish candlesticks indicating downward momentum. Although I saw signs of a bearish market, I managed to find reasons as to why the market will skyrocket once price broke through the resistance. I think this shows the power of decision making. I personally did not enter the market to catch the drop for a matter of risk management, however, given that the trade went against my final prediction (up), I am glad I didn't hop into this trade out of FOMO or it would have been a loss. This is not to say that the bullish move isn't coming in the future! We still have the Weekly descending channel and we do still have the 3 touches at the bottom of the Daily channel. Its possible that upon the fourth touch at the bottom of the Daily channel, the market will reverse where we can set a Target for the top of the Daily Channel, and potentially a second Target at the completion of the Weekly Channel.
It's important to note that price action does NOT have to reach all the way to the bottom of the Daily Channel to reverse. Once price reaches the 50% point of the Daily channel, it has the potential for a reversal.
Now that we have a clear direction of where the market is going, we can look for opportunities to scale in and place short term trades. From where price is currently sitting now to the support line at 108.331, we have the potential to bank in around 120 Pips in total.
If you'll remember yesterday I published 2 ideas on CHFJPY. Originally, I was under the impression that the market would drop as soon as it touched resistance and reverse down to the bottom of the Daily channel where we would have set our original Target. Then, Price broke through the resistance line indicating that the market was ready for bullish momentum. However, I did bring up the possibility of this being a false breakout and as we waited for the bullish pullback to go long on the trade, price tanked. The price is sitting roughly 50 Pips away from the Daily resistance with a good couple of bearish candlesticks indicating downward momentum. Although I saw signs of a bearish market, I managed to find reasons as to why the market will skyrocket once price broke through the resistance. I think this shows the power of decision making. I personally did not enter the market to catch the drop for a matter of risk management, however, given that the trade went against my final prediction (up), I am glad I didn't hop into this trade out of FOMO or it would have been a loss. This is not to say that the bullish move isn't coming in the future! We still have the Weekly descending channel and we do still have the 3 touches at the bottom of the Daily channel. Its possible that upon the fourth touch at the bottom of the Daily channel, the market will reverse where we can set a Target for the top of the Daily Channel, and potentially a second Target at the completion of the Weekly Channel.
It's important to note that price action does NOT have to reach all the way to the bottom of the Daily Channel to reverse. Once price reaches the 50% point of the Daily channel, it has the potential for a reversal.
Now that we have a clear direction of where the market is going, we can look for opportunities to scale in and place short term trades. From where price is currently sitting now to the support line at 108.331, we have the potential to bank in around 120 Pips in total.
Comment:
This is not to say that the Bullish move isn't coming in the future! We still see a valid Weekly descending channel as well as the 3 bottom touches on the Daily channel. Upon the 4th touch of the Daily channel, it most likely for price to reverse and potentially play out the long term trade(Weekly channel).
Comment:
Its important to also note that price action does not NEED to make the fourth touch on the Daily channel. Once price has reached the 50% point of the Daily channel, there is potential for a reversal.
