Dislikedwhich higher timeframe did you see the big move on - as a big move on the 1hr is not much of a move on 4hr and so on.
If 1 hr, then you obviously waited for that big move candle to close, then looked for a short on the opening of the next 1hr candle ?
Your entry was then based on m5 chart.
I personally would not enter and exit on m5. Minimum has to be m15. On m5 the moves a pretty much redunded, by the time your exit signal appears, you have just about paid the spread. And no pips .
That is why i was surprised you entered on m5.
I gather...Ignored
I didn't see the strong up move on the H1 chart. I was just suggesting that scrolling back on the H1 chart, you will often see times that strong moves with larger candles are often immediately reversed with the next candle.
In fact not all of these moves are so obvious on H1, because if the reversal happens halfway through the candle, you may only see a large candle with a long upper or lower shadow.
I saw the strong move on the M5 chart and my reasoning as posted before
QuoteDislikedWith this strong move up, most intraday shorts must have been covered now. With only buyers fuelling the market, I would expect some selling pressure to come in soon and then the bulls taking profits.
Looking for confirmation that bulls are pulling out and then open short position
To expand on that...
The strong upmove broke the high of the last 8 trading days.
Traders start to buy on the break-out
As the move continues more buyers come in
It is likely that the move took out the SL of all short positions that had been entered using H4 charts and lower adding to buying strength
Eventually bulls and bears reach an equilibrium, no more short covering and few new buyers or adding to positions.
Intraday traders start to take profits and with few new buyers price starts to drop.
That's when to look for shorting opportunities
Recently, I have been suffering with trading the larger tf as so often by the time I get into a trade, the move is already exhausted and then moves against me.
Hence this excursion into M5 and simply using the candles and PA to judge exhaustion levels/sentiment.
Early days, and I will see how it works out.
You may well be right about M5 and the spread. It requires a 50 cent move just to cover the spread and this can make things difficult when there is no thrust in the market.
I will compare and see if using M15 will tend to keep me out of bad trades.
Please Do Not PM Me With Coding Enquiries