Hello Effi
Very good information especially in this case from the interest rate point of view but countertrend trading is quite risky. This is a textbook example of S&R. In this example resistance was not reached. In this case going with the trend was the best option. I have found that trading with the trend and setting good stops works better. The saying of the trend being the friend is more powerful than buy low sell high. I highly agree that S&R are very important but alot of times it just doesn't bounce off the channel. In these cases I look to the stochs to give clues as to the sentiment of price. The divergences clearly show that market sentiment was not going to let the price get expensive hence no return to resistance. The best bet here is to short off the divergence. Granted a loss in the interest rate may be seen but profits would make up for it.
I look forward to reading your insight and opinions. Thanks.
Very good information especially in this case from the interest rate point of view but countertrend trading is quite risky. This is a textbook example of S&R. In this example resistance was not reached. In this case going with the trend was the best option. I have found that trading with the trend and setting good stops works better. The saying of the trend being the friend is more powerful than buy low sell high. I highly agree that S&R are very important but alot of times it just doesn't bounce off the channel. In these cases I look to the stochs to give clues as to the sentiment of price. The divergences clearly show that market sentiment was not going to let the price get expensive hence no return to resistance. The best bet here is to short off the divergence. Granted a loss in the interest rate may be seen but profits would make up for it.
I look forward to reading your insight and opinions. Thanks.