How to use the POC profitably
Hello dear traders,
From today's EURUSD, I'd like to show you how Equilibrium (POC) is determined and what happened next.
The first POC was drawn at 12:20 CET, the second POC at 13:00 CET, the third at 13:50 CET and the fourth at 14:00 CET. In the second POC you can see very nicely how the price is in a downtrend. Suddenly a balance develops and then the course breaks down sharply. Therefore, this POC line was a strong resistance for me. The first POC was also strong but not that crucial. Although the 3rd and 4th POC lines are either resistance or support, they had to be watched closely when touched.
The lower POC was a strong resistance zone, let's see where it came from.
On the 25th of January from 21:30 CET the first POC was formed. As you can see, this zone is crucial. When the price went down this morning at 9:30 CET, it was safe to assume that the price had fallen long enough to hold the resistance zone. Let's go back to the chart image.
As you can see, you could have done quite clean 3 trades, even though we were actually moving in a sideways range. 90 Pip is a very good result in 2 hours, especially as there was a risk allocation here. The price was up again to the second resistance level on the first trade, but you would not have made a big loss here. Although the second trade went down about 2 pip, it would have triggered my maximum stop after 4 pip. Nevertheless, it went up 30 pip. The 3rd trade hesitated at the beginning because of the 3rd POC, but then went through cleanly up to take profit. My recommendation: Do not pull take profit up to the resistance level, so you better get something out in advance. The range was always 35 pip, so I only calculated with 30 pip.
Another interesting aspect: the big players. From 09:00 CET to 14:00 CET, the price today was about 60 pip down. At 14:30 CET there was a strong upward movement of 25 pip. Then it went downhill. What happened? A big player had placed a sell order within the 1st POC. At around 14:30 CET, where everyone thought the price was going down again, he gave up a buy order with a take profit at the price level of his sell limit order. The price jumped up, his take profit triggered and at the same time the sell limit order and the price went down automatically. The course came back a bit and was then pushed down by another order. The rest was done by the small players who wanted to go downstairs. So the big player was able to collect 70 pip in 45 minutes. That's not much, but absolutely sufficient for this range. Of course, there are 100 other reasons that may actually have expired, it is important to think about how the big players act. To juggle with 50,000 euros is easy, try that with a few million or billions. You have to be very creative in order to increase the assets of investors and to generate a return of 24% at the end of the year.
You see, it's important to take a closer look and study the big player approach. We can never win against the big players even if all the Forex Factory traders team up. The big ones would just laugh at that. We have only one chance, we can not fight against them, we just have to let them take us away. All we have to do is know where the big ones are going. Learn how to draw the POC correctly and practice it daily. The best total of 10,000 hours, then you are professional. Use indicators to support, but not in the main chart, only your POC counts and what you see.
Once you've found your profitable system, focus on it and forget about the POC. If not, you have a great chance to reach your goal with the POC.
Best regards
Hello dear traders,
From today's EURUSD, I'd like to show you how Equilibrium (POC) is determined and what happened next.
The first POC was drawn at 12:20 CET, the second POC at 13:00 CET, the third at 13:50 CET and the fourth at 14:00 CET. In the second POC you can see very nicely how the price is in a downtrend. Suddenly a balance develops and then the course breaks down sharply. Therefore, this POC line was a strong resistance for me. The first POC was also strong but not that crucial. Although the 3rd and 4th POC lines are either resistance or support, they had to be watched closely when touched.
The lower POC was a strong resistance zone, let's see where it came from.
On the 25th of January from 21:30 CET the first POC was formed. As you can see, this zone is crucial. When the price went down this morning at 9:30 CET, it was safe to assume that the price had fallen long enough to hold the resistance zone. Let's go back to the chart image.
As you can see, you could have done quite clean 3 trades, even though we were actually moving in a sideways range. 90 Pip is a very good result in 2 hours, especially as there was a risk allocation here. The price was up again to the second resistance level on the first trade, but you would not have made a big loss here. Although the second trade went down about 2 pip, it would have triggered my maximum stop after 4 pip. Nevertheless, it went up 30 pip. The 3rd trade hesitated at the beginning because of the 3rd POC, but then went through cleanly up to take profit. My recommendation: Do not pull take profit up to the resistance level, so you better get something out in advance. The range was always 35 pip, so I only calculated with 30 pip.
Another interesting aspect: the big players. From 09:00 CET to 14:00 CET, the price today was about 60 pip down. At 14:30 CET there was a strong upward movement of 25 pip. Then it went downhill. What happened? A big player had placed a sell order within the 1st POC. At around 14:30 CET, where everyone thought the price was going down again, he gave up a buy order with a take profit at the price level of his sell limit order. The price jumped up, his take profit triggered and at the same time the sell limit order and the price went down automatically. The course came back a bit and was then pushed down by another order. The rest was done by the small players who wanted to go downstairs. So the big player was able to collect 70 pip in 45 minutes. That's not much, but absolutely sufficient for this range. Of course, there are 100 other reasons that may actually have expired, it is important to think about how the big players act. To juggle with 50,000 euros is easy, try that with a few million or billions. You have to be very creative in order to increase the assets of investors and to generate a return of 24% at the end of the year.
You see, it's important to take a closer look and study the big player approach. We can never win against the big players even if all the Forex Factory traders team up. The big ones would just laugh at that. We have only one chance, we can not fight against them, we just have to let them take us away. All we have to do is know where the big ones are going. Learn how to draw the POC correctly and practice it daily. The best total of 10,000 hours, then you are professional. Use indicators to support, but not in the main chart, only your POC counts and what you see.
Once you've found your profitable system, focus on it and forget about the POC. If not, you have a great chance to reach your goal with the POC.
Best regards
Forget:That does not work, amateurs build the ark, pros the Titanic!
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