Hi Webby,
Thank you for your reply and explanation.
I roughly got your points and digesting recently. regrading the range area, i got the answer from one of your article and knew how to trade SD area when in consolidation.
I took a sell trade from supply today on WTI.
I attached 3 charts in this email, Daily, 4h and 1h chart since your broker dont have WTI market.
I put my explanation on the chart why i took and what is my thinking when i want to open trade.
once again, thank you for your help in teaching me to be a great trader in near future and replace my 9-6 job. 🙂
thank you
Leo
No problem mate, happy I could help you out.
My Response:
Okay from what I’ve looked at your Oil trade seems fine, the only thing which I think you should have done differently is put your take profit at the edge of the 4 hour demand zone instead of the support level.
The 4 hour demand was the last point where the banks came into the market and placed buy trades, if they want to keep these buy trades open they’ll come into the market and buy again before the market drop through the zone, therefore it makes sense to put your take profit at the point where they’re probably going to buy again.
It’s only a small thing and it doesn’t really make much difference to be honest, you still ended up with a decent profit so the trade was a good one.
I’ve actually managed to find an online chart of Oil so I can see what happened since you sent me the email.
At the moment it seems a bit confusing to determine which way you the market is going to move.
I don’t think the move down we have seen is from the bank traders placing trades to make the market reverse, I think this is simply just them taking profits off buy trades placed before the large move up occurred from the 46.00 level. I think more upside is on it’s way in the coming weeks, if you look you can see there is a large bullish pin bar which formed on the 13th.
I reckon this pin has formed because of the bank traders placing a large number of buy trades into the market ready for the next move up to begin.
It would make sense too because of the fact lot’s of traders will have jumped into the market and sold when the bullish pin was forming, all these sell orders would’ve allowed the bank traders to get a big load of buy trades placed.
I think the low of this bullish pin is a critical point in the market, if you see a break below here with the candles actually closing below the low I think the market will probably fall down to the 46.50 level as this is the last point where the banks got a large number of their buy trades placed into the market.
As far as getting long trades placed is concerned is would wait for a break above the 52.55 high before looking to get any buy trades placed.
The 52.55 high has been created by the banks either taking profits off buy trades placed at some point earlier on in the move up or by placing sell trades to make the market reverse.
Even though I think it’s been created by profit taking I can’t be 100% sure on it so I would watch for the market to break through the high before looking for a long trade, when I say break, I mean the candlesticks actually have to close above the high not spike above it because that could still mean they’re getting sell trades placed to make the market reverse.
Cheers,
PAN.