If you’re trading +hourlies Cary & you got yourself a core position then the intra-week money flow drivers can be better adjudged in a relatively calmer environment..
It can cause angst & more than a little panic if you’re attempting to digest & form a view of the chatter/data/priorities when trading from an intraday timeframe.
Once you manage to get your core base you can utilize the data & the ebb & flow of the market currents caused by the drivers, to feed into your position.
You’ll notice (if you haven’t already) that a pair will begin to acclimatize to it’s key levels as it meanders back & forth on the back of it’s main fundamental influences. When events quieten down & the data cupboard/fundy flows are light, it’ll revert to technical trade.
These are often where your previous levels of supply-demand & the stop activity buffeting them, come into play.
The GBPCHF was offered up as an example this week, same scenario played out on the other pair mentioned earlier in the week, EURGBP. The re-visit to .7935-.7950 yesterday epitomized this behaviour too.
Price shifted down (long Sterling) on continuing disappointing Eurozone chatter. Sterling was balancing out & traders had priced in the fwd rate calibration & were focusing on dire Eurozone output.
Chatter quietened down & neutralized Monday & Tuesday whilst EU demand (stop) activity bounced it back up the ladder where it found overhead supply at the exact spot which kicked it down last Friday.
Thing is, nothing changed this week regards the key fundamentals which weighed on EU v/s Sterling. Technical trade came to the fore, & once the realities re-surfaced & traders shook the sleep from their eyes, that level which housed a previous supply-demand imbalance, clicked into gear again.
If you’re short & feeding in from further up the ladder, the intraday vibrations don’t register very highly on the radar. You use the ebb & flow to prepare to add-in again as prices meet overhead supply. You’re buying yourself time to confirm that your view remains correct…………for now!
Pull up a 240 & you’ll see it’s clearly highlighting the lower highs & lows behaviour on this pair…just look at the bar prints on the way down compared to the activity on the way back up?
We got an initial zone of potential demand lurking back at .7750-780 & we got previous lower high markers on your 60m to offer a guage to 1st level Euro strength on any reverse in the fundamental flavours from here. Job sorted.
Thing is, you got time to assess & prepare for a 2 way eventuality. You got your upside-downside levels ticked & crossed. Your profit trail stops can be calmly calc’d & you can adjudge the potential reaction of any impending data still in the can ready to print.
You got time to watch all the psychology going to work on the price, & time to gather all the relevant chatter regards stops/option barriers/fix activity etc relevant to your orders if you so wish.
You can also take a piss without stressing whether a rogue print is going to smack you in the mouth & erase your angst ridden mornings profits
