While many individual traders enter and exit positions all at once, institutional
traders usually enter and exit positions gradually. This is necessary
due to the large size of the orders being placed. Big traders are concerned
that their orders might move the market, by creating too much buying or
selling pressure at one time.
In the case of a large buyer, this can drive the exchange rate higher,
making additional purchases more expensive. So, instead of chasing the
price higher, the institutional trader waits for the price to come back to the
desired entry point, and then increases the size of the position. The result
is a currency pair that bounces back up when it falls to a particular price
level.
Does this statement make sense as to why we have retest of breakouts. Or why a level seems to hold for a while then collapses. Think about it then look for these on your charts.
I would say the lowest risk would be to enter with the big boys not fightem.
As individual traders, we can use this phenomenon to our advantage.
We can enter long trades at the levels where the big traders are buying, and
we can sell short at levels where the big traders are selling. We can also exit
long trades at points where there is evidence of institutional selling, and
exit short trades at points where there is evidence of institutional buying.
It’s important that we think of support and resistance as
areas. In a
perfect world, the exchange rate would always rise and fall to the same
exact price points, over and over again. The world of trading is far from
perfect, and prices rarely rise and fall to the exact same spot.
Just a bit from Ed Ponsi's Book I have been reading. (page 134).
Just more comfirmation of what we have been learning and looking for and some of the reasoning behind it. That tends to help some people to understand the why. Others can careless about the why.
Hope you all had a nice weekend.. Ken