Question:
I do have a question.
You mentioned that all reversals are created by the banks.
Would you say that this is on all time frames (5 min – 1 week)? And would this mean that the (bank) daytraders are working on a different ‘operation’ than the (bank) long term traders or would it be a self supporting system across all time frames?
Response:
Yes, this is correct, although not on every time-frame like you say…
There are three time horizons the banks will work off: the short-term, medium-term, and long-term.
The time-frames which best represent these time horizons are the ones which the banks use for trading. So, I would say the 1-minute and 5-minute are used for the short-term, the 1-hour for the medium-term, and the daily for the long-term.
All the reversals you see take place on these time-frames are caused by the banks either placing trades, closing trades, or taking profits.
I think the day traders and long-term traders are working together; it’s just that they have different objectives in the market.
Ultimately, the long-term traders are the most important because they are the ones who have the biggest trades placed. So, the day traders will have to operate in a way where they know they’re not jeopardizing the positions placed by the long-term traders.
At the same time, they’ll help push the market to the points where the long-term traders want to get trades placed, while also making a profit on their own trades…
Hope this helps…
PAN.