The screenshot below shows a shift from longs in control to a battle to maintain control to sellers in control.
Weekly VWAP (yellow line) restarts with each new week. You can see four weeks of rising prices, a one-week "battle" with long traders "hanging in there", and finally, two weeks of prices moving down, signalling sellers are in control.
I'm going short. Right? Not so fast.
Considerations: The latest CFTC COT report shows commercials are net long and speculators are net short, albeit in declining quantities.
The next chart is a collaboration of observations. See where long traders front-ran a known relative value price at 0.6795. As you'll see in a minute, this level will play a vital role.
Zooming in and notice the aggressive lifting of offers shown by the delta slope.
What do the points covered so far have to do with age? Synthesizing different perspectives and seeing between the differing views to extract and exploit a trading opportunity uses relativistic thinking. A thinking skill only completely accessible post-50 yrs of age.
Spoiler Alert: Here's the move in its entirety. But it wasn't simply a case of buying the low & selling the high. The horizontal lines - green, red and blue show the 'playing field'. These are the same levels that appear on the 2nd chart.
The horizontal price levels mark the boundaries of the playing field and bring order and structure to the unruly characteristic of price movement. They inform you of the price ranges of where it's okay to trade (within the playing field) and where not to trade (out-of-bounds).
Here's where things get really interesting!
You can see the power of the playing field as the market traded post-analysis.
Below shows you what traders commonly refer to as footprint view. It shows buyers lifting offers and sellers hitting bids. Using color shading intensity, the more intense the color green, the higher the number of contracts "lifted" at the corresponding offer price. Similarly, the more intense the color red, the higher the number of contracts "hit" at the corresponding bid price.
- Recall the front-running? And notice the sellers entering at the edge of out-of-bounds?
- Large buyers step in at the next playing field only once firmly established.
- Repeat of what occurred at point 2
- Approaching out-of-bounds, those who bought at levels 1, 2 and 3 sell into late buyers.
I expand on the 4 points in the upcoming video for further explanation.
The playing field was developed using systematic thinking. A skill only completely accessible post-50 yrs of age. But systematic thinking in trading doesn't end there. It also characterizes flexibility and fluency in generating ideas.
See systematic thinking when live trading during the market movement we've discussed.
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD could test 1.1750 amid strengthening bullish bias
EUR/USD remains flat after two days of small losses, trading around 1.1740 during the Asian hours on Thursday. On the daily chart, technical analysis indicates a strengthening of a bullish bias, as the pair continues to trade within an ascending channel pattern.
GBP/USD consolidates above mid-1.3300s as traders await BoE and US CPI report
The GBP/USD pair struggles to capitalize on the overnight bounce from the 1.3310 area, or a one-week low, and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.3370 region, down less than 0.10% for the day, as traders opt to wait on the sidelines ahead of the key central bank event risk and US consumer inflation data.
Japanese Yen languishes near weekly low against USD; focus remains on BoJ policy update
The Japanese Yen trades with a negative bias against the recovering US Dollar for the second straight day, pushing the USD/JPY pair closer to the 156.00 mark or the weekly top. In the absence of any fundamental catalyst, the downtick could be attributed to some repositioning trade ahead of the crucial Bank of Japan policy update on Friday.
Editors’ Picks
EUR/USD could test 1.1750 amid strengthening bullish bias
EUR/USD remains flat after two days of small losses, trading around 1.1740 during the Asian hours on Thursday. On the daily chart, technical analysis indicates a strengthening of a bullish bias, as the pair continues to trade within an ascending channel pattern.
GBP/USD consolidates above mid-1.3300s as traders await BoE and US CPI report
The GBP/USD pair struggles to capitalize on the overnight bounce from the 1.3310 area, or a one-week low, and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.3370 region, down less than 0.10% for the day, as traders opt to wait on the sidelines ahead of the key central bank event risk and US consumer inflation data.
Gold awaits weekly trading range breakout ahead of US CPI report
Gold struggles to capitalize on the previous day's move higher back closer to the $4,350 level and trades with a mild negative bias during the Asian session on Thursday. The downtick could be attributed to some profit-taking amid a US Dollar uptick, though it is likely to remain cushioned on the back of a supportive fundamental backdrop.
Dogecoin breaks key support amid declining investor confidence
Dogecoin trades in the red on Thursday, following a 4% decline on the previous day. The DOGE supply in profit declines as large wallet investors trim their portfolios. Derivatives data shows a surge in bearish positions amid declining retail interest.
Monetary policy: Three central banks, three decisions, the same caution
While the Fed eased its monetary policy on 10 December for the third consecutive FOMC meeting, without making any guarantees about future action, the BoE, the ECB and the BoJ are holding their respective meetings this week.
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