— 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
— Trading only the first return of price to a valid, properly evaluated level can greatly increase your win ratio. Trading second or other subsequent returns will only dilute your trading edge.
Comment
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Who shorted ? I personally missed the trade by 1 pip. If i was in front of the screen, i had taken the trade. I dont see it more as a fresh zone and now it might break through and hit the next supply zone . Update later.
I shorted, lets see what the next day´s brings to us
Glendoonie
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Selling also now SL 0.73512 TP 0.2171. This may take a couple of days ...
Glendoonie
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@Glendooie, Took my last profit at 0.71419 at about fib 50.0. I think this trade has further to fall - perhaps to 0.71022 (fib 38.2), but I've probably squeezed enough out of this pair. I wish to thank Tradewonk for his analysis and other FOREX insights :-)
livingdaylight
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Let's see if it reaches...
I also have the H4 embedded in the Daily Sz.
Similar to my GbpUsd short from last Thursday where Price reacted to the Daily proximal line and never reached the H4 level (yet).
Do you have a way of deciding whether to take the Daily or H4 or smaller zone in a Supply zone?
and...
What difference does it make taking the Daily or H4 or smaller time frame when we can simply adjust position size to ensure we only risk our 1% (or whatever) regardless of time frame?
livingdaylight
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@livingdaylight, Maybe, I answered my first question re: time frame