GBPJPY 4 HR - Using Liquidity to Analyze & Plan for the week.
Hey guys,
This is my update for GJ for the next week or so.
There are so many things that can happen from here, because as we know, the market is never straightforward. These are just a few of my projections and i will slowly eliminate options and adjust my analysis as the week goes by and we start to see changes in both market conditions and price action.
I would need to see confirmations at my points of interests (not shown) for me to actually take a trade. But basically, we are still stuck in a consolidation, and we need to wait for price to remove liquidity at either the highs or lows so we can start seeing what price wants to do.
Right now, we are sitting in a bullish Fib to go higher, but I am not sure if it is a reversal fib or a retracement fib to go lower. I will definitely need more confirmation.
Basically - the way I see the market is that Liquidity, runs everything. Thats why there are so many manipulations and patterns etc. Price will remove buyers or sellers THEN continue in its desired direction. It needs to shake off all the people riding it before continuing and this is why I always say, 'If a setup looks too good to be true, it usually is.'
For example - Think of a marathon - If i was a marathon runner why would I run a marathon with a weighted backpack on and ankle weights? I would TRY to run; realize they were weighing me down, then I would throw them off and then continue running.
Thats basically how the market is with all the retail traders trying to ride it in all directions.
If it wants to start trending bullish for example - It may consolidate for a bit, accumulating buyers and sellers, retrace bullish or even just wick to remove liquidity and all sellers to shake them off before continuing bearish, because the buyers will be removed eventually as price starts trending down.
Thats how I see the market anyways and when I learnt to see the market like this and base all my projections/analysis around liquidity, I was able to become more aware of price manipulations and fake outs so i was able to avoid them.
Thinking like the banks and 'market makers' is the best way to become consistently profitable, because you will understand how and why price action moves and behaves in order to make money and you find yourself no longer getting stuck in liquidity traps and raids with the other retail traders.
You need to see where all the liquidity is on the chart and THEN do your analysis and projections.
Ask yourself -
- In order to make as much money as possible, what does the bank need to do?
- Which way is the most cost-effective way for the bank to move price? Because after all - The market is run like a business.
- When you have all of this THEN you can start to do your technical analysis.
- Does this look too good to be true?
- What are other retail traders looking at doing here?
- What does the market WANT them to do ?
When I began to ask myself these questions i really started seeing a huge difference in my trading and my consistency and i wish someone had told me this sooner in my journey!
:)
This is my update for GJ for the next week or so.
There are so many things that can happen from here, because as we know, the market is never straightforward. These are just a few of my projections and i will slowly eliminate options and adjust my analysis as the week goes by and we start to see changes in both market conditions and price action.
I would need to see confirmations at my points of interests (not shown) for me to actually take a trade. But basically, we are still stuck in a consolidation, and we need to wait for price to remove liquidity at either the highs or lows so we can start seeing what price wants to do.
Right now, we are sitting in a bullish Fib to go higher, but I am not sure if it is a reversal fib or a retracement fib to go lower. I will definitely need more confirmation.
Basically - the way I see the market is that Liquidity, runs everything. Thats why there are so many manipulations and patterns etc. Price will remove buyers or sellers THEN continue in its desired direction. It needs to shake off all the people riding it before continuing and this is why I always say, 'If a setup looks too good to be true, it usually is.'
For example - Think of a marathon - If i was a marathon runner why would I run a marathon with a weighted backpack on and ankle weights? I would TRY to run; realize they were weighing me down, then I would throw them off and then continue running.
Thats basically how the market is with all the retail traders trying to ride it in all directions.
If it wants to start trending bullish for example - It may consolidate for a bit, accumulating buyers and sellers, retrace bullish or even just wick to remove liquidity and all sellers to shake them off before continuing bearish, because the buyers will be removed eventually as price starts trending down.
Thats how I see the market anyways and when I learnt to see the market like this and base all my projections/analysis around liquidity, I was able to become more aware of price manipulations and fake outs so i was able to avoid them.
Thinking like the banks and 'market makers' is the best way to become consistently profitable, because you will understand how and why price action moves and behaves in order to make money and you find yourself no longer getting stuck in liquidity traps and raids with the other retail traders.
You need to see where all the liquidity is on the chart and THEN do your analysis and projections.
Ask yourself -
- In order to make as much money as possible, what does the bank need to do?
- Which way is the most cost-effective way for the bank to move price? Because after all - The market is run like a business.
- When you have all of this THEN you can start to do your technical analysis.
- Does this look too good to be true?
- What are other retail traders looking at doing here?
- What does the market WANT them to do ?
When I began to ask myself these questions i really started seeing a huge difference in my trading and my consistency and i wish someone had told me this sooner in my journey!
:)