This analysis is for my own use as notes, but may help others trying to learn how to trade. I often review my notes to improve my chart reading. A big focus of mine, as of late, is strengthening my foundation on technical analysis: legs, levels, and momentum.
This chart explains legs in play, and how price retraces said legs, and some of the ideas I had when price was coming down.
When making a swing low or swing high, a new leg is formed. Price will attempt to test all significant levels gained/lost within that leg.
This chart explains the smaller time frame on why I was interested in getting long the 0560s area. The reasoning was simple: price gained support in the leg to the left, and was left untested. The long would have worked, but was not supported in the way I first expected. Reviewing that setup, tells me I need to be more aware of momentum, as well as potential levels lower that formed during previous accumulation. I did set a limit order at 0535 looking for a bounce from the low 30s. I set the order a few pips higher to ensure the trade was filled. I took profit on the trade before markets closed, because I did not want to be exposed over the weekend, because I do see some levels left untested inside weekly candle lows from March 2015. If momentum takes us down to those areas (my guess is we get a quick test on or before 14 December, and we setup for a huge rally during Fed rate announcements.
I'm only mentioning news events not because of what is said, but for the liquidity and lack of liquidity they create. Illiquidity is actually the reason why these huge spikes and drops happen.
Ultimately, I know price is going to eventually fail at these 1.0500s and push lower to test the accumulation that took us from the bottom of the primary monthly leg.
Monthly charts aren't really tradable in the way I like to trade, but are useful in understanding the big picture of trend.
The intermediate trend suggest sideways action (accumulation), probably in preparation for 14 December announcement. The test at 0870 created a second test follow through opportunity to produce a first test at 0990 and 1020 above. If the weekly 0480s level just below fails to hold support, the long idea is scrapped and momentum from the monthly downtrend was sustained.
The weekly picture clearly examples accumulation:
If this larger accumulation fails, as I said before, price continues lower as per the monthly.
I think next week is going to present some huge profit opportunities.
This chart explains legs in play, and how price retraces said legs, and some of the ideas I had when price was coming down.
When making a swing low or swing high, a new leg is formed. Price will attempt to test all significant levels gained/lost within that leg.
Ultimately, I know price is going to eventually fail at these 1.0500s and push lower to test the accumulation that took us from the bottom of the primary monthly leg.
The intermediate trend suggest sideways action (accumulation), probably in preparation for 14 December announcement. The test at 0870 created a second test follow through opportunity to produce a first test at 0990 and 1020 above. If the weekly 0480s level just below fails to hold support, the long idea is scrapped and momentum from the monthly downtrend was sustained.
The weekly picture clearly examples accumulation:
If this larger accumulation fails, as I said before, price continues lower as per the monthly.
I think next week is going to present some huge profit opportunities.
Trade active:
Long from 0510, 0490, 0480