This chart shows the opportunites of trades that are setting up when the E/J moves up like it did on Thursday for 427 pips from low to high.
The London opens up with consolidation, then shoots upward for 43 pips to reach the pinnacle.
On this chart I show the Support at 157.91 that is considered the lowest point on this upward move heading into the Frankfurt and London.
Not even the Asian Session could successfully breach this lowes point, even though there was a test when price dipped within 9 pips of this mark.
Then you can see the price continues upwards with the lows getting higher each move going upwards, not until the London session did we see the first sign of a movement down when price finally broke below the lowest of the London session - this is my first Yellow support line at the top of the chart where is it says London Low.
Now that the high of highs has been reached, and the softening is starting to reveal itself, I would be preparing to take shorts as price continues downwards.
You can also see on this 5 min chart the where I have place the yellow lines showing each support line as price comes downward.
I would be taking shorts on each breach which in this case would be 4 Short entries which cleared +10 pips each trade with no problem.
Then I would be careful when price came to the support 157.91 exiting trades, but considering a LONG against the trend when price bounces this line test.
Then you can see the price dipped below this low for 9 pips, but I would not be even considering a SHORT here yet, but would be watching for the candle to close below this line in case. You can see the candle straddled this support line, and the candle closed bullish with the support bounce taking over and a retrace upwards in motion.
The next thing to consider here is sitting back after getting 10 pips LONG from the bounce, waiting for the retrace upwards till the Short signal comes into play with the support 157.91 actually giving out with bearish pressure.
The price retraces up 61.8% which is still not a trade with this strategy, but would have been considered on another strategy I use shorting the retrace upwards at 38% - 50% and 61.8% levels.
Once the price makes its normal retrace upwards, the bears are ready to jump in and put some money on this next move below with expectation of breaking into the next lower segment.
You can see on the chart where price comes down once again to test the support, this time with the candle closing below the line, which is good, now I would have 1 Short at the 157.91 break of line, and the 2nd Short would be anywhere in between the 157.82 and 157.91 area to catch the move up to test the new resistance which was just support the 3 hours prior, and before the Asian/London session.
You can see when price goes below it has a hard time now going back above the 157.91 and actually consolidates there for 6 - 5 min candles - then price makes its move downward into the next lower segment.
Now I watch the low of the candles that sat there testing this line unsuccessfully, and place a mark there at 157.69 and switch to a 1 min line chart to watch the price action.
Price never closes above this 157.69 line which is now considered resistance and you can see the movement down was strong enough to continue into the second lower segment. (note: I consider a segment about 65-80 pips in distance).
Hopefully this basic chart can give an idea of price action and the type of trades that are available, especially once the E/J makes a big move of this caliber.
Enjoy the weekend.
Cheers,
Ken
The London opens up with consolidation, then shoots upward for 43 pips to reach the pinnacle.
On this chart I show the Support at 157.91 that is considered the lowest point on this upward move heading into the Frankfurt and London.
Not even the Asian Session could successfully breach this lowes point, even though there was a test when price dipped within 9 pips of this mark.
Then you can see the price continues upwards with the lows getting higher each move going upwards, not until the London session did we see the first sign of a movement down when price finally broke below the lowest of the London session - this is my first Yellow support line at the top of the chart where is it says London Low.
Now that the high of highs has been reached, and the softening is starting to reveal itself, I would be preparing to take shorts as price continues downwards.
You can also see on this 5 min chart the where I have place the yellow lines showing each support line as price comes downward.
I would be taking shorts on each breach which in this case would be 4 Short entries which cleared +10 pips each trade with no problem.
Then I would be careful when price came to the support 157.91 exiting trades, but considering a LONG against the trend when price bounces this line test.
Then you can see the price dipped below this low for 9 pips, but I would not be even considering a SHORT here yet, but would be watching for the candle to close below this line in case. You can see the candle straddled this support line, and the candle closed bullish with the support bounce taking over and a retrace upwards in motion.
The next thing to consider here is sitting back after getting 10 pips LONG from the bounce, waiting for the retrace upwards till the Short signal comes into play with the support 157.91 actually giving out with bearish pressure.
The price retraces up 61.8% which is still not a trade with this strategy, but would have been considered on another strategy I use shorting the retrace upwards at 38% - 50% and 61.8% levels.
Once the price makes its normal retrace upwards, the bears are ready to jump in and put some money on this next move below with expectation of breaking into the next lower segment.
You can see on the chart where price comes down once again to test the support, this time with the candle closing below the line, which is good, now I would have 1 Short at the 157.91 break of line, and the 2nd Short would be anywhere in between the 157.82 and 157.91 area to catch the move up to test the new resistance which was just support the 3 hours prior, and before the Asian/London session.
You can see when price goes below it has a hard time now going back above the 157.91 and actually consolidates there for 6 - 5 min candles - then price makes its move downward into the next lower segment.
Now I watch the low of the candles that sat there testing this line unsuccessfully, and place a mark there at 157.69 and switch to a 1 min line chart to watch the price action.
Price never closes above this 157.69 line which is now considered resistance and you can see the movement down was strong enough to continue into the second lower segment. (note: I consider a segment about 65-80 pips in distance).
Hopefully this basic chart can give an idea of price action and the type of trades that are available, especially once the E/J makes a big move of this caliber.
Enjoy the weekend.
Cheers,
Ken
Attached Image (click to enlarge)
It will probably go up now I am going to bed....