Pretty risky is the business of marking out tops and bottoms but here on this chart and even riskier to trade just that, today we will discuss why it could be likely that Pound may lose steam and start to fall against Yen from a technical standpoint. Now before we continue. I want to highlight here that is in no way to be considered a trading setup. This is purely for understanding and educational purposes.
1. So First off we squeeze or zoom out to get a overview and a see the bigger picture here on our chart. We mark out the major levels we consider significant.
2. We then proceed to mark out a few of the more immediate and short term levels where we think markets could react to.
3. We find price movement to be inside a channel like structure.
4. We see price continually respected channel's key tops and bottoms and responded with rallies or impulse moves.
5. Now nearing the top zone once more, we find price to be over extended in movement and perhaps from the looks of it. Bulls could be nearing exhaustion.
6. We look towards the space down and now know there's room for a deeper correction and when price is over extended we know that oscillators will be showing signs of over bought as well.
7. Coming to conclusion. If we have buy trades running we will look to close and walk away, wait out till the correction phase completes and buy the dip to have a better risk to reward ratio on our buy setups.
8. Now here you may ask why did I choose not to sell here. Because Its not worth the risk you see going in a sell here goes against the trend of the time frame and thus once you break one rule you will break more and the rest and then losses become inevitably unavoidable.
Thank you. I hope you enjoyed this little lesson. Give it a thumbs if you like what I had to say and leave a comment down below and tell me if you agree or not and Happy trading to you all.
1. So First off we squeeze or zoom out to get a overview and a see the bigger picture here on our chart. We mark out the major levels we consider significant.
2. We then proceed to mark out a few of the more immediate and short term levels where we think markets could react to.
3. We find price movement to be inside a channel like structure.
4. We see price continually respected channel's key tops and bottoms and responded with rallies or impulse moves.
5. Now nearing the top zone once more, we find price to be over extended in movement and perhaps from the looks of it. Bulls could be nearing exhaustion.
6. We look towards the space down and now know there's room for a deeper correction and when price is over extended we know that oscillators will be showing signs of over bought as well.
7. Coming to conclusion. If we have buy trades running we will look to close and walk away, wait out till the correction phase completes and buy the dip to have a better risk to reward ratio on our buy setups.
8. Now here you may ask why did I choose not to sell here. Because Its not worth the risk you see going in a sell here goes against the trend of the time frame and thus once you break one rule you will break more and the rest and then losses become inevitably unavoidable.
Thank you. I hope you enjoyed this little lesson. Give it a thumbs if you like what I had to say and leave a comment down below and tell me if you agree or not and Happy trading to you all.