I am pretty sure that some of the times the circles could be represented by a ellipse as well, which in that case, the support and resistances change a bit, but thats why I draw many circles. Also its because my charting software does not allow ellipses to be drawn
Sometimes its really tough to see some of these supports and resistances, specially when motion does not offer a lot of touch points.
The reason that I said its going to dip, was the following:
On the post here:
http://www.forexfactory.com/showthre...03#post5016503
The last circle which connects all the highs of 3300, namely 3380,3372 and 3365, had several bouncess off its outer perimeter
If the motion was definite going beyond 3400, then there is always a behaviour that is tied to a circle that has to go hand in hand with it. That behaviour is a "Stickyness" to the inside or the outside perimeter of the chosen circle. In this case I was looking for "Stickyness" to the outside perimeter.
The observation of this "Stickyness" is further confirmation that the downtrend does not have a chance.
The absence of this behaviour, will present another possibility and that is a "False Break" if the motion does not show "Stickyness". A false break usually travels somewhere around 25% to 30% of the diameter of a circle after its penetration through the pole, and then it reverses.
So I had to figure out, whether its worth it to go for a buy, given a chance that we might have a false break or wait for the pole break to present itself, so that I can eliminate the "False Break" scenario and choose a better sell position.
So thats why I said that sell orders at 3420 region and sell orders at 3310 region are best, because you avoid the doubt of the false break.
It never got to 3420, but I sold at 3380 and if you would have sold at that level, even if it went upward to 3420 and beyond, you have more chances of getting out at break even.
Sometimes its really tough to see some of these supports and resistances, specially when motion does not offer a lot of touch points.
The reason that I said its going to dip, was the following:
On the post here:
http://www.forexfactory.com/showthre...03#post5016503
The last circle which connects all the highs of 3300, namely 3380,3372 and 3365, had several bouncess off its outer perimeter
If the motion was definite going beyond 3400, then there is always a behaviour that is tied to a circle that has to go hand in hand with it. That behaviour is a "Stickyness" to the inside or the outside perimeter of the chosen circle. In this case I was looking for "Stickyness" to the outside perimeter.
The observation of this "Stickyness" is further confirmation that the downtrend does not have a chance.
The absence of this behaviour, will present another possibility and that is a "False Break" if the motion does not show "Stickyness". A false break usually travels somewhere around 25% to 30% of the diameter of a circle after its penetration through the pole, and then it reverses.
So I had to figure out, whether its worth it to go for a buy, given a chance that we might have a false break or wait for the pole break to present itself, so that I can eliminate the "False Break" scenario and choose a better sell position.
So thats why I said that sell orders at 3420 region and sell orders at 3310 region are best, because you avoid the doubt of the false break.
It never got to 3420, but I sold at 3380 and if you would have sold at that level, even if it went upward to 3420 and beyond, you have more chances of getting out at break even.
DislikedHi,
your chart's lowest circle looks nicely-formed, so I thought I'd figure for myself why you chose a possible down move. (And it resembles an earlier chart of mine here.)
I'm not sure if A1 needs to be an ellipse; maybe a circle would be better -- oh wait, I see posts 1087,9. Okay, it's close; point is, I just am seeing pivots for A1 that are about as good as your circle at A2.
I don't really see a lot of large, trendline (pivot-touching) circles on the 1'TF, just so it is good practice to study your charts. And, I'm not as sure about circles,...Ignored
