Institutional buy on GBP JPY/ order block
If you know about institutional candles this is something to look for, daily uptrend but finding some weekly resistance at the highs. Last week closed doji so we could have a final push up to take out previous highs before swinging back down.
Institutional candle = trapping sellers on the wrong side of the market before a strong push in the opposite direction (up) - Banks loaded up on shorts at the institutional candle (IC) highlighted, then hedged up on even more buy orders at the candle low causing the market to rocket.
When they take profits at the highs, it causes price to retrace to the IC where the banks will mitigate their short positions at a small loss / break even. This causes the market to shift once again in the bulls favour. This is sometimes called an order block as the orders are locked into the market and if the market should continue up, the price is 'blocked' from breaching the level. If it does break then it becomes a breaker block and look to enter shorts at the retest of the order block.
By trading this IC, it offers very good R:R as you have your stop below the wick of the IC, I recommend researching into institutional buys and pairing it with your other knowledge! Institutions don't lose in these markets!
Good luck
Institutional candle = trapping sellers on the wrong side of the market before a strong push in the opposite direction (up) - Banks loaded up on shorts at the institutional candle (IC) highlighted, then hedged up on even more buy orders at the candle low causing the market to rocket.
When they take profits at the highs, it causes price to retrace to the IC where the banks will mitigate their short positions at a small loss / break even. This causes the market to shift once again in the bulls favour. This is sometimes called an order block as the orders are locked into the market and if the market should continue up, the price is 'blocked' from breaching the level. If it does break then it becomes a breaker block and look to enter shorts at the retest of the order block.
By trading this IC, it offers very good R:R as you have your stop below the wick of the IC, I recommend researching into institutional buys and pairing it with your other knowledge! Institutions don't lose in these markets!
Good luck
Comment:
sometimes its better to sit and watch what happens, so far we see a small reaction from this area but it could easily sell off, if it plays out then great! Implement this theory into future scenarios, if not then no matter, look to see what price action showed us and take the other side when it retests the block. The beauty of this style of trading is that it allows for very small stop losses based on the IC and huge R:R - correctly identifying an IC candle however is the harder part.. I recommend the 3 or 4HR TF for identifying IC candles and following the daily/weekly trend ofc
Comment:
^^The idea is to buy at the top of the IC candle closure and/or 50% fib of the candle body - stop loss below the wick of the IC candle and target equal highs, leave some partials to run