Once you know their cycle and the tracks they lay, you have a better understanding as to what is happening and what "may" happen... Take AUDJPY in this case....
Asian session, which doesn't normally have the transactions to drop price like this, that fast, showed them parking price right after the drop... I can tell you there are many traders who jumped the short side with late orders and are now "stuck".... Asian session is for setting the high and low for the day and then ranging.... they are walking the price up away from the trapped shorts, accumulating orders. As the range extends, it also compresses.... upon release, we sometimes see a 3 - 4 bar push, on the 15m period, out of this range.... most times its a head fake and will trap additional orders, opposite of the true, intended, direction of price. You may also see a small stop hunt or if enough orders are already trapped, a straight away run away from the trapped orders.
Trapping volume...accumulating orders and then they bring the pain....what causes the most pain is what's most profitable and the Fox eats well!
-CJ-
Asian session, which doesn't normally have the transactions to drop price like this, that fast, showed them parking price right after the drop... I can tell you there are many traders who jumped the short side with late orders and are now "stuck".... Asian session is for setting the high and low for the day and then ranging.... they are walking the price up away from the trapped shorts, accumulating orders. As the range extends, it also compresses.... upon release, we sometimes see a 3 - 4 bar push, on the 15m period, out of this range.... most times its a head fake and will trap additional orders, opposite of the true, intended, direction of price. You may also see a small stop hunt or if enough orders are already trapped, a straight away run away from the trapped orders.
Trapping volume...accumulating orders and then they bring the pain....what causes the most pain is what's most profitable and the Fox eats well!
-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.