When price is captured between a ceiling and a roof, its better to BLSH. what does BLSH means?
It means Buy low, Sell high. when price reaches the top of trading range, you can bet that it goes down. You might say "why? Isn't that at some point it will break out of this range and start to trend?"
I will say to you yes, BUT most of attempts to break out will fail. You can see in chart that how many times EURCAD tried to break out of her prison, but it couldn't do it.
So, if you see price reaches top of trading range AND you have right signal you can short.
Here in 22nd of December you had you signal. in that day price tried to reach higher but it did reverse and came back, the long tail on top of the candle says that to us.
It means Buy low, Sell high. when price reaches the top of trading range, you can bet that it goes down. You might say "why? Isn't that at some point it will break out of this range and start to trend?"
I will say to you yes, BUT most of attempts to break out will fail. You can see in chart that how many times EURCAD tried to break out of her prison, but it couldn't do it.
So, if you see price reaches top of trading range AND you have right signal you can short.
Here in 22nd of December you had you signal. in that day price tried to reach higher but it did reverse and came back, the long tail on top of the candle says that to us.
Why? because of the VACUUM effect. nobody wants to short in the middle of TR when you can short on top of it. why would you sell when you know you can sell at a better and higher price with a better ratio of reward to risk? so there are little sell orders on the way of price to the top. that's why supports and resistances tend to act like a magnet. so I am worried about that buying pressure but a little.
you're not convinced? look at previous candles of EURCAD and see it by yourself.