Hi Jupiter,
i think your considerations are well funded, i would also say if that pair if it goes above 1.9850, that could be the start of a short (what is short?) rally
but below 1.9600 i could imagine that it goes down much deeper to 1.9360
Also if you look on the monthly (i know u are a short term trader) there is this major trendline, which it hasnt touched yet, so i know i shouldnt go against the trend
but what about a buy limit order in the area of 1.9360?
Anyway, it could do anything in a month
I understand you are not an intra-day trader. So answering your question:
I tend to place orders above the support lines or below them. (same for resistances) so in this case I would place 2 orders:
Buy @ a few pips above the support line (1.9360) and stop loss @ the opening of a sell order which would be below the support line (1.9360). One should cancel the other once you have defined the trend.
Montlhy has failed to break 1.9360 a few times. Maybe next time it will be able to break it.
Mentioning trend, it can be very relative. As you say, I am an intra-day trader.
Relativity of trends:
Monthly: Up
Weekly: up-flatening
Daily: Down
H4: up
H1: down-flatening
For me, particularly, since I close my positions at the end of the day, I look into D1, H4 and H1. I don't usually go to lower time-frames(only when I want to be very precise in drawins) because I consider them to have a lot of "noise".
So for me, I "see" the following:
Major trend is down (daily) but testing its UTL. Secondary trend is up (h4) testing the major trend UTL. The third trend (H1) is down but has broken the UTL of the major trend (daily).
As you can see, right now, for me and other intra-day traders, we are under a fight between a major trend and a second trend, which matches the wide picture trend(monthly). So as you say you could go, going short doesn't really mean you are going against the trend. It really is all relative and depends on you trading strategy, profile and mony management.That's my opinion at least.
Dcb, another member and great participant of this thread, recommended a book to me, which I am presently reading right now. It's called "Beat The Odds in Forex Trading".
I have to say that the author made me understand what Aediaz has told me a few times already:
#1 reason for traders to quit is the frustration inflicted on them when their PREDICTIONS aren't fulfilled. So don't predict, but have a plan and act once the trend is defined.
It's VERY, VERY frustrating/stressing for traders who make predictions have their forecast not becoming a reality. Besides, they spend so much time on it, that they completely forget their strategy. Which at the end of the day, should be: what to do once price gets there?
I would say that, we will have two options in the near future: sell or buy, which ultimately are the only two ways price can move.
I thankd Aediaz and Dcb for their help and recomendations.
Here I attach a chart trying to illustrate what I am trying to say. Do not take the levels below the arrows for granted. I am only trying to ilustrate my thoughts.
