Tuesday

AUD Today Part 2: Trade Overview

In line with the previous post plan, partial profits were taken at yesterday’s high agreement area.
Price then had a sharp and fast sell off, and:
  1. The speed of the move used up all available sellers at that specific moment in time
  2. The speed of the move enticed “price chasers” to enter because many traders fall for the counter intuitive nature of markets, relating fast movement to price continuation. However, fast movement uses up available fuel in the short term
And when price failed to move into today’ low agreement area, I had enough ducks in a row to warrant going long (re-entering)
More partial profits were taken on:
  1. A quick burst in price which would have used up buying fuel short term.
  2. Price then paused allowing for more buyers to enter, so additional profits were taken at yesterday’s/today’s high agreement area.
  3. And finally, the last exit occurred when stuck shorts pushed price very quickly beyond the previous high. Often at previous highs/lows an imbalance between traders exiting at market verses traders wanting to business at the same price occurs. Price will move several price steps in order for all orders to be filled as market exit orders search for traders to do business with. If you are taking the other side of emotion fuelled price movement, you are providing liquidity to the market. 
While today’s premise was correct, often it’s difficult to time entries and exits and place stops in the most ideal areas (scaling out helps address timing exits). I get rinsed out frequently having to re-enter after booking losing trades. There are also times when my premise is not correct. This is the ambiguous nature of trading; it’s not a game of perfect.

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